Alaska Business Monthly March 2016

WINTER TOURISM | REGIONAL INVESTMENTS | PORTS & HARBORS | NORTH SLOPE GROWTH

Digital Edition

March 2016

Building Alaska  Housing  Project Roundup  Workforce Training  Construction Forecast Special section begins on page 8

Carol Gore President & CEO CIHA

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March 2016 TAB LE

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CONTENTS ABOUT THE COVER

DEPARTMENTS From the Editor ���������������������������������������� 7 Inside Alaska Business �����������������������125 Right Moves �����������������������������������������128 Eat, Shop, Play, Stay ���������������������������132 Events Calendar �����������������������������������137 Business Events �����������������������������������138 Alaska Trends ���������������������������������������139 Ad Index �����������������������������������������������142

“Forever Alaskan” Carol Gore, president and CEO of Cook Inlet Housing Authority, is a quintessential leader in creating affordable housing for Alaska.

She graces our cover for March and Shehla Anjum’s story about her leads us into ABM’s robust Building Alaska special section beginning on page 8.

Cover Photo: © Judy Patrick Photography Cover Design: David Geiger, Art Director

ARTICLES Winter travelers can learn how to make a pie.

Insurance

68 | Commercial and Contract Surety Bonds An important asset to all parties involved

By Tracy Barbour

© Heather A. Resz

Consultant’s Corner

Safety First

74 | Simple Sabotage: Basic Rules to Influence Productive and Safe Behavior

By Brian McKay

HR Matters

78 | Morale Boosters for Those Left Behind Acknowledge the emotional toll of a layoff

By Kevin M. Dee

Telecom & Technology

80 | Alaska’s Can-Do Approach to Telecommunications From telegraph to broadband

By Heather E. Hudson

Visitor Industry

86 | Winter Tourism on the Rise in Alaska Take a pie-making class, book a tour of Dallas Seavey’s kennel, learn to photograph the Northern Lights

By Heather A. Resz

86 Arctic

92 | World Economic Forum Principles for Arctic Investment Responsible Arctic Investment Protocol adopted at Davos

By J. Pennelope Goforth

Alaska Native Business

98 | Alaska Native Corporations Create Opportunities Investments provide new capital, direct and indirect benefits

By Julie Stricker

Economic Development

98 | Regional Investments in Bristol Bay and the Aleutians Funders help create local jobs and meet community needs

By Molly Dischner

130 | Accolades Compiled by Tasha Anderson 4

Rendering of CH2M’s Internet Café at the new Arctic Oilfield Hotel in Deadhorse.

101 | Industrial and Commercial Warehouse and Storage Space in Alaska A quick look at markets in Kenai, Fairbanks, and Anchorage

By Chad Graham

Transportation

102 | Port of Anchorage and Port MacKenzie Work Together Proximity promotes reciprocal economic development

By J. Pennelope Goforth 108 | Help for Small Boat Harbors State matching grant program improves facilities

By Tasha Anderson

110

DIGITAL EXCLUSIVES

Real Estate

Transportation

Expanded in Digital Edition © Winchester Alaska, Inc.

72 | Creating a Transferable Business Is my company too dependent on me?

By Mel B. Bannon

Oil & Gas

110 | The New Arctic Oilfield Hotel Way better than the old AOH

By Susan Harrington

Oil & Gas

118 | Point Thomson

Alaska Business Monthly | March 2016 www.akbizmag.com

Alaska’s Economy ot h

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#letsfixitak We need a long-term, balanced plan to fix our economy, one that cuts spending, increases revenue sources, and preserves vital public services. We’re all in this together – and that’s how we’ll fix it.

Insist our elected officials take action during the 2016 legislative session to stabilize our economy.

Add your voice. facebook.com/AlaskasEconomy

First National Bank Alaska paid for this campaign. First National Bank Alaska is a member FDIC and an Equal Housing Lender.

March 2016 TAB LE

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CONTENTS

special section Building Alaska

8 36 Courtesy of ABC of Alaska

Carol Gore at one of the Cook Inlet Housing Authority residential developments. © Judy Patrick Photography

Matthew Lee at ABC Craft Championship.

36 | Construction Workforce Training Providing skilled workers throughout Alaska

By Rindi White

12 | Anchorage Housing Nowhere to go but up … literally

By Terry Fields 14 | Housing Construction in Alaska Demand is growing across the state

By Kailee Wallis Expanded in Digital Edition 20 | Another LEED: UAF BB Campus First in UA system to be certified

By Molly Dischner Expanded in Digital Edition 24 | UAA New Engineering Building Part II New construction for Alaska’s future engineers

By Tasha Anderson 6

28 | Statewide Construction Roundup

By Russ Slaten Expanded in Digital Edition 32 | Alaska Laborers Apprenticeship Program Training construction workers with a variety of skills

By Rindi White

Expanded in Digital Edition 50 | Alaska Airport Projects ‘Transitioning into a maintenance standpoint’

By Julie Stricker 56 | Alaska Business Monthly's 2016 Construction Directory

32 Courtesy of Alaska Laborers Union

8 | Carol Gore Leader of Southcentral’s affordable housing movement

By Shehla Anjum

40 | 2016 Alaska Construction Spending Forecast For the Associated General Contractors of Alaska and the Construction Industry Progress Fund

By Scott Goldsmith and Pamela Cravez, Institute of Social and Economic Research, University of Alaska Anchorage

Apprentices at the Alaska Laborers new training school.

Alaska Business Monthly | March 2016 www.akbizmag.com

FROM THE EDITOR Follow us on and

Volume 32, Number 3 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 Contributor

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

BUSINESS STAFF President Billie Martin VP & General Manager Jason Martin VP Sales & Marketing Charles Bell Senior Account Mgr. Anne Tompkins Senior Account Mgr. Bill Morris

Account Mgr. Janis J. Plume

Accountant Ana Lavagnino 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, ©2016, 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/Digital-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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MARCH MADNESS

y the time this March issue of Alaska Business Monthly is published the state may be close to passing the FY2017 Operating Budget.

An interesting and unprecedented measure passed the Alaska State House of Representatives by a vote of 38-1 on February 8.

House Concurrent Resolution 23 Suspending Rule 23(a), Uniform Rules of the Alaska State Legislature, relating to measures in possession of standing committees and special committees of the Alaska House of Representatives, and Rules 20, 21(c), and 24(a), Uniform Rules of the Alaska State Legislature, restricting committee meetings of the Alaska House of Representatives to measures that substantially relate to and have as their primary purpose appropriating, raising, or allocating state revenue, until the Alaska House of Representatives passes a state operating budget to the Alaska Senate.

Efforts by the Alaska House of Representatives could possibly be likened to the NCAA’s March Madness with both spending and revenue possibilities facing sudden death elimination. Team Permanent Fund Earnings is pitted against Team State Income Tax. State Income Tax loses. Team Permanent Fund Earnings advances to a match with the dangerous Team New Resource Industry Taxes. New Taxes loses. Similarly, Team PFD Only is pitted against Team Share Earnings to Fund State Government. In this election year, the winner of that match is anybody’s guess.

Appropriations brackets could pit Health and Social Services against Education and Early Development, Corrections against the University of Alaska, Transportation against Public Safety, Oil Tax Credits against State Assistance to Retirement, the Legislature against Administration. More likely the bracketology will include line items throughout the $6.8 billion FY2017 Operating Budget submitted by Governor Bill Walker.

It’s commendable that the Legislature is tackling the budget during regular play [January 19 through April 17] and not overtime [special sessions]. Let’s hope they don’t go for a slam dunk by just using the Constitutional Budget Reserve Fund to balance the Operating Budget because there’s only enough money left in that for two years, if that. Recent rumblings are for a $4 billion deficit due to rising mandated formulaic spending and continued low oil prices.

The legislative process of passing the Operating Budget is no game, though, and needs to include a long, hard look at facts and choices.

University of Alaska Institute of Social and Economic Research Director and Professor of Economics Gunnar Knapp points out in “An Introduction to Alaska Fiscal Facts and Choices” that the “Legislature is allowed to use the earnings [of the Permanent Fund] for any purpose. We have been using most but not all of the money for dividends and inflation proofing.”

Knapp also presents a simple formula to help Alaskans understand the state’s “fundamental fiscal tradeoffs—over any period of time—are what we can spend equals our income minus what we add to our savings.”

The solution is not simple though, and he points out that properly cutting spending “takes time to debate the state’s priorities, to figure out better ways of delivering services, and to find efficiencies.” Also that “it’s politically hard and it will get harder.”

Knapp is compelling and informative—and so is the March issue of Alaska Business Monthly. The team has put together another really great magazine. Enjoy!

—Susan Harrington, Managing Editor March 2016 | Alaska Business Monthly

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special section

Building Alaska

Carol Gore Leader of Southcentral’s affordable housing movement

By Shehla Anjum

U

nder Carol Gore’s leadership the Cook Inlet Housing Authority (CIHA) has made significant advances in providing quality, affordable housing for residents of Southcentral Alaska. Gore, president and CEO of CIHA for the past fifteen years, calls herself a “Forever Alaskan” whose mother is originally from Ninilchik. She was born in Anchorage and grew up in Mountain View, a neighborhood that her organization is now revitalizing. “It has been a great privilege that my work with CIHA allowed me to make a difference in the neighborhoods where I was born and raised,” Gore says.

Empowering Alaskans

Alaska’s fourteen regional housing authorities, including CIHA, were created by the State of Alaska in 1974 in response to a critical need for quality affordable housing for elders, families, and individuals, Gore says. As Cook Inlet Region’s tribally designated housing entity, CIHA is eligible to receive Indian housing block grants from the US Department of Housing and Urban Development (HUD), but CIHA offers its services to everyone, not only Alaska Natives, Gore says. “Fifteen years ago CIHA made a decision to serve everyone without preference. We offer a diversity of housing from studios to four-bedroom rental homes as well as home ownership. Our mission is to empower all people.”

To serve both Native and non-Native clients, including low- and moderate-income families and seniors, CIHA mixes various sources of money, including HUD grants, to develop housing. “The mix includes state money, foundation money [Rasmuson primarily] grant funds, [and] debt financing from banks such as Wells Fargo and Northrim. We use a lot of debt instruments to help with mortgage financing,” Gore says.

8

Before coming to CIHA, Gore worked in the real estate department of her Native corporation, CIRI, for ten years and managed a $200 million portfolio. At CIHA Gore found a different environment. CIHA looked and acted like a nonprofit and it did not have the familiar for-profit corporate profile that includes a “pyramid of leaders,” she says.

“It was vastly different. I was working for a board rather than an individual.”

She realized that CIHA would benefit from using a village council leadership structure that uses consensus building, bringing everyone’s best talents together to meet CIHA’s mission. She focused on building a “leader full” organization, in which “every leader has the responsibility to bring their best talent to the table, to learn from each other, and to work collaboratively to attain the best outcome,” Gore says. Her organization employs village values of community development where everyone matters and everyone is essential.

The new way of thinking led to changes, such as increasing the use of data to make decisions. “CIHA went from an organization that looked governmental to one

with a structure that an investor like Wells Fargo or Northrim Bank could look at and understand,” Gore says.

Gore’s job goes beyond managing a staff and projects. Instead of “putting one foot in front of the other” as many organizations do, she and her team are “innovating and looking for best practices and are engaged at all levels.”

Live. Work. Play. Co-Chair

An example of that engagement is her involvement with Live. Work. Play., the community change effort of Anchorage Economic Development Corporation (AEDC), which is aimed at making Anchorage the number one city in America in which to live, work, and play by 2025. Housing availability for all segments of the population is critical for that, says Bill Popp, president and CEO of AEDC. Popp has known Gore since she joined the effort five years ago.

“The lack of affordable workforce housing was one of the critical areas that that needed a lot of focus and effort. Carol, as one of the leaders in that field, co-chairs the Live. Work.

Play. housing working group,” Popp says.

Alaska Business Monthly | March 2016 www.akbizmag.com

Š Judy Patrick

www.akbizmag.com

March 2016 | Alaska Business Monthly

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That group includes a wide variety of people involved in Anchorage’s housing market. Gore’s work with the group brought new collaboration between the private sector, nonprofit, and government entities seeking solutions for housing, Popp says. “CIHA has successfully built mixed-income housing such as Grass Creek Village and Loussac Place. I consider Carol and CIHA as major change agents in a number of neighborhoods such as Mountain View, Fairview, and the Muldoon area.”

‘Rainbow’ of Financing

CIHA’s success results from an ability to put together a complex “rainbow” of financing from many sources, says Joe Beedle, chairman of Northrim Bank. “Contracts, grants, development credits, tax credits from banks—all go into creating the housing. Carol has figured out how to leverage developers, funds from Alaska Housing Finance Corporation, and conventional financing. Most of CIHA’s products have up to seven layers of financing, including credits, loans, and grants,” Beedle says.

Northrim Bank has participated in two CIHA developments, Coronado Park Senior Village and Mountain View Village V, as a Low Income Housing Tax Credit investor. The investment will allow the bank to receive approximately $18 million in federal tax credits over a ten-year period, according to Beedle.

CIHA’s housing developments are notable for good design, Popp says, and the way they take advantage of the natural beauty around a neighborhood. “CIHA embraces Anchorage’s outdoors, our trails and parks, which are essential to the health of our community. The philosophy Carol brought to CIHA goes hand in glove with what we have been doing with Live, Work, Play.”

A housing shortage, particularly for affordable units, has plagued Anchorage for many years, and it is exacerbated by the shrinking availability of land. The solution is building higher density homes. “People are fearful of [high] density, and it’s not right for every neighborhood,” Gore says.

“But we have to consider it. In order to increase housing we have to build more multifamily, duplexes, tri-plexes and four-plexes.

“We’ll need to look at appropriate opportunities where it makes sense to increase density in a thoughtful manner. We need to engage the community and explore the trade-off of being located near amenities in exchange for closer quarters and increased affordability,” she says.

Mountain View Efforts

One part of Anchorage that has benefitted from CIHA’s involvement is Mountain View. Kirk Rose, executive director of the 10

Anchorage Community Land Trust, has worked closely with Gore since 2011 on the revitalization effort there. “The effort in Mountain View needed energy, excitement, support, and partners; it wasn’t just going to lift off by itself. Carol was the right person to move it along.”

The Mountain View Neighborhood Revitalization plan was created in 2001, and land acquisition began in 2002. So far CIHA has spent $84 million on improving the area’s housing by providing new family, senior, and retail spaces. The housing includes both rental and for-sale units.

About 130 deteriorated buildings were replaced with 277 new, affordable homes, including 51 single-family houses. Gore believes the new housing and businesses in the area, once overlooked and burdened with an unsavory reputation, will now attract people and business investment.

“People have forgotten that Mountain View is five minutes to downtown, that there are three schools there, and that kids can actually walk to school. There aren’t many neighborhoods like that,” Gore says.

In 2014, HUD awarded CIHA its Secretary’s Opportunity and Empowerment Award by the American Planning Association for the Mountain View revitalization. Shaun Donovan, the HUD secretary, praised “the remarkable turnaround of Mountain View Village” and singled it out as an “outstanding example of how innovative thinking and the power of partnerships can transform communities.”

Gore, who grew up in Mountain View, says the work there is a “catalyst for the kind of change that would build our community.” The vision that guided Mountain View is now shifting to Spenard, where a contaminated site will be developed for housing and retail.

Plans for Spenard

That site once housed PJ's strip club, a Spenard fixture. CIHA bought that site and also space across the street, knowing both sites had significant environmental issues.

Gore realized that while the location was great, most private developers would balk at the cost of cleaning up the contamination. “We made the decision to clean up that site and bring something back that catalyzes the private market so it begins to develop alongside us,” she says.

The state approved a $1.9 million grant to pay for the environmental cleanup. Construction on thirty-three units of rental family housing will begin this year, with development costs estimated at $9.6 million.

To date, CIHA has developed 1,245 single- and multi-family rental units, with that number increasing to 1,278 with the

33 Spenard units set for construction in 2016 and 2017. CIHA has also developed 67 homes for ownership in the last seven years.

As a property owner, CIHA knows it is accountable for the condition of its properties. “Some of our buildings have been around since 1978, but they look brand new. That is on purpose. We own them and they are on our resume. It’s very public.”

CIHA’s activities are not confined to Southcentral. Helping others is central to Native culture, and CIHA has had what Gore calls “mentorship agreements,” such as the one between CIHA and the Association of Village Council Presidents Regional Housing Authority for housing in Hooper Bay, in Western Alaska. “We each brought our experience to this development. [The Association of Village Council Presidents] brought its rural construction expertise and we built nineteen units together. We continue to support the management of that housing.” Gore expects such efforts to continue. “We are a technical resource to support them.”

The HUD Secretary’s award is one of several recognitions for CIHA in recent years.

In 2013, Gore was selected to become a member of the US Census Bureau’s National Advisory Committee on Racial, Ethnic, and Other Populations. The selection is apt because CIHA relies on census data to support HUD funding and other data to guide development decisions.

‘Everyone Matters’

Putting up buildings helps alleviate the housing shortage and brings affordable homes on the market, but CIHA’s developments are aesthetically pleasing and cater to people with different income levels.

In 2015, CIHA’s attempts to create attractive neighborhoods got a big boost, when ArtPlace America selected it for a $3 million grant that is intended to “push arts and culture as a core segment of community planning and development.” During the three-year duration of the grant CIHA will explore new techniques to incorporate arts and cultural strategies into its future work.

For Gore, housing is a means for creating a successful community with beautiful neighborhoods, engaged residents, and empowered people: a place where “everyone matters.”

“Our focus is on rebuilding neighborhoods in collaboration with a variety of businesses, funding sources and partners to foster economic, educational, and social outcomes.”

R Writer Shehla Anjum is based in Anchorage.

Alaska Business Monthly | March 2016 www.akbizmag.com

special section

Building Alaska

Anchorage Housing Nowhere to go but up … literally

By Terry Fields

A

nchorage is a small city with some big-city challenges, few of which are discussed as often as the cost of housing. The reality is if low-density housing is not “affordable” today, it likely never will be. Housing affordability is defined and tracked by reviewing monthly housing costs in relation to monthly income. Affordability is thus positively influenced by either the reduction of housing costs/prices or the increase of income. The challenge with improving this ratio is that neither factor can be manipulated in a vacuum, and their interconnectedness will in most situations cancel each other out. The core of this circular reference is that land is a theoretically fixed resource, and despite reductions in construction costs or incentives to fuel consumers’ financial capacity, price (land value) will always rise with demand if supply remains fixed. This pattern is seen in Anchorage where unemployment has fallen, incomes have risen, and financing costs are at historical lows. These conditions certainly influence the income side of affordability (demand), but without the ability to add supply, competition over limited real estate continues to raise prices— nearly 14 percent since 2011—offsetting any gains in affordability. This is not to say that real estate prices cannot fall; however, reductions in real estate values are almost always concurrent with recessions and reductions in population, employment, income, and/or access to inexpensive financing. While housing costs may fall, all of these conditions counteract average net affordability by concurrently reducing the average monthly income. Those able to retain their employment and incomes may find themselves in a cheaper housing market, but they will also find themselves in a depressed economy (example: 1985-1988).

Land and Price

Many point to high construction costs (26 percent to 37 percent premium nationally) as the catalyst for high housing costs in Anchorage, but the discrepancy of lower housing prices in Wasilla and Palmer, where the majority of new construction 12

has been occurring, is clear evidence that materials and labor are not the primary culprit. Again, it is land and the cumulative demand for its finite, unique attributes that differentiate the price. Land receives its value from its current highest-and-best use and confidence (speculation) that the value will maintain or rise in the future. This confidence comes from the characteristics

Comprehensive Plan of 2001 clearly identified that, “The Municipality of Anchorage is reaching a major crossroad as the amount of remaining undeveloped land continues to decrease, and older developed areas continue to age.” In response they identified four growth scenarios, stating that the community favored the “Urban Transition” scenario, calling for more “intensive urban charac-

Alaska has a lot of land; Anchorage does not. Stopping short of developing over state parks, leveling mountains, or filling in the inlet, Anchorage will run out of buildable land. Like every metropolitan area before it, as demand increases and land values rise, highest-and-best use will force denser development in Anchorage. of its inherent location—a robust economy, an environment that attracts populations, and an optimism of the future. These are all appearances that a city works to achieve; rising land values is a desired and foreseeable consequence.

Alaska has a lot of land; Anchorage does not. Stopping short of developing over state parks, leveling mountains, or filling in the inlet, Anchorage will run out of buildable land. Like every metropolitan area before it, as demand increases and land values rise, highest-and-best use will force denser development in Anchorage. There are means of “producing” more land by making available some land that is currently held off the market or building a bridge, and these strategies would temporarily reduce the pressure for land in the immediate vicinity of Anchorage, but without subsidies these ideas are most likely to occur only when land values have risen so high that the cost to bring infrastructure into these locations can be offset by market prices.

None of this information is novel. A 2012 Anchorage Housing Market Analysis highlighted that the city only had enough residential land to meet 50 percent of housing demands expected by 2030 under current density standards. The Anchorage 2020

ter.” Raising incomes, decreasing financing costs, even lowering construction costs will not make Anchorage housing more affordable in the long run. Only through more efficient use of land will the city be able to incentivize housing that the market allows and its residents can afford. Density was the answer in 2001, it was the answer in 2012, and it is still the answer today.

The question now is: “How do developers, the city, and the community work together to offer density in a way that is desired versus required?”

R

Terry Fields, MBA, MS, is the Program Director and Assistant Professor of the Weidner Property Management and Real Estate Program, housed in UAA’s College of Business and Public Policy. Contact him at 907-786-4136 or tjfields@uaa.alaska.edu.

Alaska Business Monthly | March 2016 www.akbizmag.com

special section

Building Alaska

Housing Construction in Alaska Demand is growing across the state

By Kailee Wallis

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I

“

f an Alaskan can’t find a place to live, he or she is more likely to leave. If a business is trying to bring in new people that can’t find a place to live, they’re going to struggle. If a senior, who has contributed to building the state, can’t find a place they can afford to live, they are also likely to leave. And ultimately, it’s going to be very difficult, if not impossible, for a community to thrive … if there’s no housing available,” Bryan Butcher, CEO of Alaska Housing Finance Corporation (AHFC),

explained at the opening of the Governor’s Housing Summit hosted by UAA on January 6. In a packed Cuddy Hall, the Governor hosted a convention calling all housing experts from around the state to come together and create innovative solutions to Alaska’s current housing problems.

Housing has become a prominent and increasing problem in rural Alaska for years and is a growing problem in the larger Anchorage municipality as well. Whether it’s a homelessness problem, a lack of affordable

Alaska Business Monthly | March 2016 www.akbizmag.com

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housing, lack of senior-housing options, or available land for private sector builders, it is evident in communities across the state.

“You look across the state and every community has some issue,” said Butcher. The governor is attempting to face the housing problems in Alaska head-on despite the current fiscal state, and his Housing Summit was the first step in finding a solution to some of these problems.

Affordable Housing Lack of affordable housing was a consistent theme of the Housing Summit’s speakers.

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$363,000 right now. That takes someone making $80,000 a year. Most Alaskans don’t make $80,000 a year,” Butcher said to the crowd at the Governor’s Housing Summit. According to Butcher, the common occurrence in Anchorage is that people become “stuck” in their current housing situation. Someone begins in a starter home or a condo, then starts a family and needs to expand into a large house but is faced with the price point of a $400,000 house for the next step—so they stay where they are.

That affects the first-time homebuyer because no one is moving through the housing market. “There’s got to be more housing,” said Butcher. ”When you end up with paralysis at one level, it affects every level.”

According to the federal department of Housing and Urban Development, a typical household should spend about 30 percent of their income on housing. According to a Housing Needs Assessment performed

by AHFC in 2014, more than 35 percent of households in the Anchorage municipality spent more than 30 percent of their income on housing. High rent is a part of this problem. With the knowledge of the average rent in Anchorage is $1,200, according to AHFC’s Butcher, “an Alaskan would have to make $22.55 an hour to be able to pay that 30 percent. The average renter in Anchorage makes about $17.47 an hour. Not very close.” It’s an annual gap of $10,566 for a full-time worker.

And the problem is even more evident in smaller communities outside of Anchorage.

Diane Kaplan, executive director of the Rasmuson Foundation, told a story at the Governor’s Housing Summit about traveling to Kodiak with Ed Rasmuson, chairman of the Board of Directors at the Rasmuson Foundation. They visited the Brother Francis shelter and saw about forty men “elbow to elbow” in the facility. When they asked why all these men were un-employed and homeless, a worker at the facility stated, “Ed and Diane, all these guys are working, but there’s no housing in Kodiak.” That was Kaplan’s “sobering moment.” “It’s not a homelessness problem, it’s a housing problem,” stated Kaplan.

AHFC’s Solutions

AHFC has started taking steps to bringing housing solutions to Alaska—constructing more affordable housing, a lot more. Most recently, they held the opening of Ridgeline Terrace, a seventy-unit, energy-efficient housing complex located in the heart of Mountain View in Anchorage. The project was funded in part by Rasmuson Foundation, a tax credit private investment by Key Bank, grants, federal tax funds, and AHFC. The partnership between AHFC and the Cook Inlet Housing Authority, which will manage the property, brought the whole project together.

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Alaska Business Monthly | March 2016 www.akbizmag.com

Tools Alaskans May Not Know About Self-Help Housing

“Similar to Habitat for Humanity … Instead of one home it’s usually about six homes, and then everybody has to put their sweat equity into it, and then everyone in the neighborhood is putting up their homes. It’s a USDA funded program. We had our fiftieth self-help home built this year in Kenai,” says RurAL CAP Communications Director Janet Hall. Designed for first time homebuyers, Self-Help Housing gathers eligible participants to earn “sweat equity” by physically working with RurAL CAP construction directors to construct their new homes. Buy earning sweat equity, individuals are offered lower mortgage loans and reduced home costs. This is a partnership with AHFC’s Homeownership Development Program.

Home Choice Classes

“There’s research that shows that people spend more time researching a purchase of a TV than they do their own home,” says Stacy Schubert, AHFC director of governmental relations and public affairs.

AHFC suggests their Home Choice classes for first time homebuyers, or even homebuyers returning to the market after a few years. Each eight-hour class is free to the public and offers information on finding an energy-efficient home and how to navigate finding a real estate agent.

Senior Access Program (SAP)

AHFC provides grants for seniors (over the age of fifty-five) to make accessibility modifications to their own homes. This allows seniors to live independently for longer and still be a part of their community.

Senior Housing

“They say that you can tell what kind of people live in a community by how they treat their seniors,” said Governor Bill Walker, “and I think there’s housing opportunities in that realm too.” In 2012, former Governor Sean Parnell held an Alaska Senior Housing Summit; the senior housing problem was identified as a quickly growing population with a housing sector that could not keep up. According to the executive summary of the senior housing summit, Alaska’s senior population is growing at a rate of approximately 6 percent per year, which will continue to increase as the Baby Boomers reach retirement age.

When Raven Landing opened in Fairwww.akbizmag.com

banks in 2010, the original twenty-unit community filled quickly. According to a Fairbanks Daily New Miner report in 2010, Karen Parr, who raised funds for the Raven Landing project on Kickstarter in 2003, said, “There were none of these in Alaska when we started.” Since then, Raven Landing has been a great success in the community, adding an additional twenty units in 2012 and another twenty units in 2013. Raven Landing plans on adding an additional thirty-five units this year. Their funding has come from private donors, AHFC, Rasmuson Foundation, and two state of Alaska legislative grants.

Recently, Rasmuson Foundation announced a $125,000 grant to the Retirement Community of Fairbanks, owners of the property, to finish funding the fourth building that Raven Landing is adding this year.

Tlingit-Haida Regional Housing Authority, operators of Kake Senior Center located in Kake, received $221,000 from the Rasmuson Foundation to renovate the center.

According to the Alaska Senior Housing Summit executive report, seniors contribute an estimated $1.9 billion to the state’s economy from their retirement incomes and healthcare expenditures. In Alaska’s difficult fiscal times, these housing problems are too important to forget about, according to AHFC’s CEO Bryan Butcher. “We are dealing with trying to solve these problems in a difficult fiscal time. And they’re too important to say, ‘Well, we don’t have a lot of money this year, I guess we won’t talk about it.’”

“It’s all inter-connected and once one area has problems, then they all have problems … and I think that’s what we’re seeing in Anchorage, that’s what we’re seeing in Juneau, and all over the state,” says Butcher. As we face some of these challenges in the upcoming years, as Alaskans we need to collaborate and seek creative opportunities and strategies, according to Butcher.

While the Governor’s Housing Summit was the first step in finding solutions to housing problems in Alaska, the problems have long been identified. Alaskans will see more housing construction across the board in 2016 from private sector, affordable housing, low-income housing, and senior housing, as well as transitioning some of the homeless into permanent supportive housing.

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“Providing apartments does more than just add critical inventory to our housing shortage. We know that short supply and poor conditions of housing in Anchorage also leads to negative health, social, and economic consequences that cost our state and municipality funding,” said Carol Gore, president and CEO of the Cook Inlet Housing Authority, at the opening of the housing community on January 8.

Ridgeline Terrace is the first housing community to open under AHFC subsidiary Alaska Corporation for Affordable Housing. The Alaska Legislature passed HB119 in 2011, which allowed AHFC to

create the subsidiary for the sole purpose of developing affordable housing across the state. The opening of the new housing community attracted many local and state figures including US Senator Dan Sullivan, Alaska Senator Bill Stoltze, a representative from US Senator Lisa Murkowski’s office, and a representative from Governor Bill Walker’s office.

“Affordable housing leads to stronger communities and stronger families,” Sullivan told the crowd inside the Jewel Jones Community Center, which is the “hub” of the Ridgeline Terrace housing community.

The apartments include fifty units cre-

ated for low-income families, twenty senior housing units, the Jewel Jones Community Center, and a day care created in a partnership with Kids’ Corps, Inc. So far, Cook Inlet Housing Authority has received 158 applications for Ridgeline Terrace. “Eightyseven applications for the fifty family units … if that doesn’t tell you there’s a demand then nothing else will,” said Gore.

Availability of Land

Only 1 percent of the land in Alaska is owned by the private sector, according to Walker.

This makes the land availability very low, and that in turn makes land prices inflate.

In a breakout group at the Governor’s Housing Summit focusing on innovative funding and financing options, a common cry throughout the group was that land, development, and construction is too expensive. “There’s two things you need really for housing to work, one is you need financing … the second thing is you have to have land.

And that’s been a problem—affordable land for development,” said Walker.

In June 2015, Sullivan introduced bill S. 1492, which requests federal land to be made available for purchase to the Municipality of Anchorage. “I don’t want to jinx it, but I had a bill, brought it to the committee just before Christmas, that would finally, finally enable the city to buy nine acres of very prime real estate in midtown in Anchorage, and we’re hoping to have that pass the senate in about a month or so … so we have a place for more affordable housing,” announced Sullivan to the crowd at the Ridgeline Terrace opening.

According to congress.gov, the bill was first introduced in June of 2015 and has been passed to the Committee on Homeland Security and Governmental Affairs. More land availability, and easier to develop land for private sector developers, would lead to the start of solutions for the tight housing market in Alaska.

Gap between Cost of Construction and Appraisal High costs in development and construction of the high-priced and not readily available land lead to developers spending more than they can afford to charge for a housing unit. In discussion at the Governor’s Housing Summit, several people cited that the rent one is able to charge for a unit or the appraised value of a property often doesn’t match the actual building costs. Fixing appraisals is a “piece of it,” said Butcher, but won’t fix it all. Butcher reiterated the discussion of the Governor’s Housing Summit and said that many times developers project the cost to build a multifamily housing unit and “at the end of it [a developer] realizes he’s going to have to 18

Alaska Business Monthly | March 2016 www.akbizmag.com

charge $2,000 a unit for rent, and he’s only going to be able to get $1,300. So the project never gets off the ground. It becomes obvious that he’s going to lose money.” Butcher said that the cost of development on difficult to reach lands or swamplands, in Anchorage in particular, is part of the high cost for private developers.

Homelessness

“Minimizing the revolving door of going in and out of these hospitals—it’s limiting the number of community service patrol pick-ups, and it’s hopefully preventing people from having to be incarcerated. All of which are pretty expensive and big costs to society,” says Janet Hall, communications director for RurAL CAP (Community Action Program). RurAL CAP is a private, nonprofit organization which has taken the initiative of the “housing first” motto— with the belief that providing housing first can lead to becoming a better citizen in society. RurAL CAP aims to build affordable housing and housing for the homeless.

According to a study done by AHFC in 2009, Alaska’s homeless persons count was at 4,583—an increase of 38 percent from 2008 and an increase of 24 percent from 2007 to 2008. RurAL CAP suggests permanent supportive housing for some of those individuals. According to the same study conducted by AHFC in 2009, more than 20 percent of the homeless were either chronically homeless or dealt with chronic substance abuse. “They might not be ever able to go back into society, without the risk of being pushed back out onto the street again,” says Hall. RurAL CAP operates Karluk Manor, Sitka Place, and Safe Harbor Muldoon as examples of permanent supportive housing.

RurAL CAP’s next project for supportive housing is 325 East 3rd Avenue in Anchorage, formally known as the John Thomas Building. Upon the closing of Homeward Bound, RurAL CAP is switching their focus to the idea of permanent supportive housing. When asked when the construction of the new housing will be done, Hall says, “It depends on the funding. One of our private developers we’re working with said the average of a new unit in Anchorage, a per unit cost, is $330,000.” The building is estimated to cost $6.4 million according to the Rasmuson Foundation, which recently donated $475,000 to help with this Housing First project. RurAL CAP hopes to open this downtown building, “probably within the next year.”

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Oil & Gas Construction

Serving Alaska Since 1984 www.conamco.com

Kailee Wallis is a freelance journalist living in Anchorage. www.akbizmag.com

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special section

Building Alaska

© Molly Dischner

Assistant Professor of Sustainable Energy Tom Marsik shows the heat recovery system in the crawlspace of UAF Bristol Bay Campus in August 2015.

Another LEED: UAF BB Campus First in UA system to be certified

By Molly Dischner

I

n what could be a model for rural building and University expansion alike, the University of Alaska system received its first Leadership in Energy and Environmental Design (LEED) certification in 2014.

But the LEED certification didn’t go to one of the newly built buildings in Anchorage or Fairbanks. It wasn’t part of a concentrated effort by the University regents to earn recognition for their leadership. Instead, the UA system’s first LEED certification is housed in what was once an old auto parts store in downtown Dillingham.

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Green Building

Project Champion Tom Marsik has a long history of involvement and interest in green building. So when the University of Alaska Fairbanks (UAF) Bristol Bay campus was looking to expand, it just seemed natural to him that the building would incorporate energy-efficiency and green building techniques.

Now, the campuses Applied Sciences Building in Downtown Dillingham is the university’s first to receive a LEED certification. Marsik hopes it won’t be the last.

“My hope is that it encourages others, or other parts of the University of Alaska system, to be more energy efficient,” says the assistant professor of sustainable energy at UAF’s Bristol Bay campus.

The LEED certification is given by the US Green Building Council and based on a wide range of criteria, from making the building a healthy work space to minimizing energy use. The applied sciences facility received the council’s basic level of certification, out of four possible levels.

The LEED certification looks at seven dif-

Alaska Business Monthly | March 2016 www.akbizmag.com

Courtesy of Tom Marsik

The Sustainable Energy Lab in use at the University of Fairbanks Bristol Bay Campus.

“My hope is that it encourages others, or other parts of the University of Alaska system, to be more energy efficient.”

—Tom Marsik Assistant Professor of Sustainable Energy, UAF Bristol Bay campus

ferent areas. Some criteria were out of reach for the Applied Sciences building, including those that looked at how far building materials had to be shipped. Little material is available locally in Dillingham. Access to public transportation was also unattainable; there isn’t such a system in the town. So Marsik and others focused on the criteria achievable for rural Alaska like site selection and energy use and savings. That helps make it a little more of a model for the region, too, bewww.akbizmag.com

cause they targeted practical achievements that others could work on as well.

Putting it Together

The architectural firm on the project was McCool Carlson Green, under a contract from the university’s facility services department. Marsik says he was one of several people who made suggestions along the way for energy efficient components. He and others also provided documentation as to how some of the suggestions, like triplepane windows, would pencil out. The firm ultimately put it all together.

UAF Bristol Bay purchased the old NAPA store when they were looking to expand because it’s right across the street from the main campus building. Marsik said the renovation was completed in 2014, after which the campus applied for the certification. The LEED certification was awarded in April of 2015 and arrived in Dillingham in August of 2015.

The renovations were initially focused on improving the facility as a teaching space.

Marsik says it also provided an opportunity to make the building more energy efficient and something of a model for others. It’s also the first building with a LEED certification in Bristol Bay, but Marsik says there’s plenty of room for others to follow suit.

“We live in Alaska in a cold climate,” Marsik says. “We have a lot of old buildings.”

The building houses the sustainable energy, nursing, and environmental studies programs on the main floor, with apartments above. The certification applies just to the first floor, which is the portion the University retrofitted. Each floor is about 3,600 square feet.

Energy Renovations

Marisk had encouraged the University to incorporate more energy efficient practices

March 2016 | Alaska Business Monthly

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ABOVE: Assistant Professor of Sustainable Energy Tom Marsik shows the thickness of walls at the UAF Bristol Bay Campus Applied Sciences building in January 2016.

LEFT: Assistant Professor of Sustainable Energy Tom Marsik demonstrates a bike-powered generator at the UAF Bristol Bay Campus' Applied Sciences Building, one of several energy-friendly features that helped earn it a LEED certification in January 2016.

BELOW: The retrofit of the Applied Sciences Building at the UAF Bristol Bay campus helped turn an old auto parts store into a modern teaching facility—including this nursing lab, shown in January 2016.

Photos Š Molly Dischner

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Alaska Business Monthly | March 2016 www.akbizmag.com

in its main building before the retrofit occurred, following an example he set: in 2013 Marisk was recognized by the World Record Academy for building the “World’s Tightest Residential Building” in terms of air-tightness. So when the discussions of the teaching space renovations began, he also pushed for the energy renovations.

One major feature of the building is the REMOTE wall technique, which was refined by the Cold Climate Housing Research Center in Fairbanks. Essentially, the project added six inches of foam insulation to the outside of the building, making it retain more heat. Many buildings in Alaska can easily use this technique to improve their own efficiency.

Marsik says that upgrade was paired with a heat recovery system. That improves ventilation while reducing heat loss, improving energy usage and the quality of the air.

“We are recovering the heat from the warm stale air that is going out and transferring it to the fresh cold air that is coming in,” Marsik says.

The Applied Sciences building required enough of an overhaul that it was possible to add the system, but the systems are actually more common in residential buildings than commercial ones. Not all commer-

cial buildings have room to accommodate changes to the ventilation, making it a difficult upgrade in some commercial spaces.

Hard to Compare

Marsik says it’s difficult to compare energy use of the renovated building with its prerenovation status because the data isn’t available, and it’s now used for an entirely different purpose. But he notes that an Alaska Housing Finance Corporation study shows that the average public building in Alaska uses 149,372 BTUs per square foot in a year, while the new Applied Sciences facility uses an estimated 55,000 BTUs per square foot per year. Using average energy cost numbers available for Alaska, Marsik estimates that the BTUs savings translate into a cost savings of about $17,280 each year.

And the building’s features aren’t all energy-focused.

Marsik says the LEED criteria also look at health components of the building, so UAF used low-VOC (volatile organic compounds) paint and other building materials that are considered better for health when they were putting together the project.

Although there’s no dollar value on health, those features actually came in handy when the campus hosted a training

session for the Alaska Native Tribal Health Consortium and was able to meet the criteria for a healthy space, Marsik says.

Teaching Tool

The building itself also serves as a teaching tool. Marsik, who teaches in the building, says students can measure the walls and calculate the expected R-value based on the insulation and also get into the crawlspace to see how the heat-recovery ventilator works.

“It’s not just for students in classes,” Marsik says. “If we have events here, we use it as an educational opportunity.”

The certification comes at a cost, and while Marsik says not every building needs the certification, he would like to see green building techniques incorporated elsewhere in the region and the state. The renovation included a focus on techniques that could be applied by other projects, and Marsik says he’s hoping it sparks more energy-efficient buildings in the UA System and in the Bristol Bay region. “My message is about having green buildings where energy is an important component, especially in Alaska.”

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special section

Building Alaska

UAA New Engineering Building Part II New construction for Alaska’s future engineers

By Tasha Anderson

I

n contrast to the bustling activity of the strong-floor lab, the Dean of Engineering’s office is quiet but purposeful, much like university offices nationwide. It takes only a minute of speaking with College of Engineering Dean Fred Barlow (an electrical engineer) and College of Engineering Facilities Manager Kimberly Riggs (a civil engineer) to see that the same current of excitement about the new Engineering & Industry Building on the University of Alaska Anchorage campus is present anywhere one goes in the building. It’s infectious; I find myself wanting to jump on one of the sensors installed to record earthquake data or to toss containers off the side of a corner stairwell to see how their contents survive the fall.

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Alaska Business Monthly | March 2016 www.akbizmag.com

UAA’s Engineering and Industry Building was designed

by Livings Slone, Inc. to create spaces that encourage an engineering mindset. A pedestrian overpass sky bridge connects the Engineering and Industry Building with the Health Sciences Building on the south side of Providence Drive.

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Photos by Philip Hall/University of Alaska Anchorage

March 2016 | Alaska Business Monthly

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be surprising, Barlow says it was absolutely necessary to keep up with the growth of the engineering program. “A little over a decade ago, this engineering program served just 400 or 500 students; now we’re at about 1,300. The program has just exploded.” Barlow says that, in his experience in talking with construction and engineering companies in Alaska, part of the reason for this growth is that sometimes hiring someone from outside to work in Alaska doesn’t work out for a variety of reasons. “A lot of those companies really seem to like having the ability to educate and train engineers right here in Alaska. We believe it is part of our mission to meet that demand, and we take it seriously.” The growth in the program necessitated more space.

In fact, the new building alone isn’t enough. At press time some faculty were located in an annex building, awaiting the completion of the renovation of the original building this summer.

Photo by Philip Hall/ University of Alaska Anchorage

The Student Innovation Lab at the Engineering and Industry Building on the University of Alaska Anchorage campus.

This new facility isn’t just a space to house Engineering classrooms, students, and faculty. From the ground up, the new Engineering & Industry Building was designed and constructed to create spaces that encourage an engineering mindset.

Construction of the building took approximately two years. At press time the actual cost of the building is still being accumulated, but the budgeted cost for construction of the new facility was $57 million, with the total project cost, including planning, design, and administration, coming in at $75 million. Just looking at numbers, the building has twenty-one labs (including computer labs), three E-learning classrooms, four student breakout rooms with video conferencing capability, and forty faculty and staff offices, Riggs says.

The new building has four floors and is approximately 80,000 square feet and opened for use in July 2015.

More Space for a Growing Program Barlow says that the original engineering building, which is currently being renovated and was “gutted and stripped down to basically the structure,” is approximately 40,000 square feet. When renovation on that building is complete, the college of engineering will have approximately 120,000 square feet of space. “We will have tripled our space,” Barlow says. While that kind of growth may 26

Engineering in View

One of the exciting features of the new building is that much of what is usually behind the scenes is out in the open for students to see and learn from. “Equipment like air handlers would typically be in a penthouse,” Riggs says, “but what’s unique about [this building] is that they’re exposed. We have windows so students can actually see the mechanical systems in there—the pumps and the air handlers and the fans.”

The fourth floor, where the equipment is located, is not a restricted space, so anyone in the building can take stairs or an elevator to the top level and see the building systems. “In all the buildings I’ve worked in… you can work in a building for a decade and not even know that equipment is there because it’s all behind some door,” Barlow says. The large array of windows allows students to see an actual application of the theoretical work they study.

In addition to seeing the machinery, there are panels throughout the building which display data about the building—for example, energy usage. “An electrical engineer who’s thinking about how to design a building and how the power system of a building works can actually look at the various parameters of the electrical system in this building and learn from that,” Barlow says. The fourth floor also features a large window to view an Internet/communications closet. On the third floor, one panel has a window which allows viewing of the system that controls automatic shades.

But it’s not just the ability to see the infrastructure: all kinds of data are available.

Seismic sensors are installed in each floor of

the building, that record how the building reacts, floor to floor, during an earthquake.

Barlow says, “When an earthquake happens, which is common here, of course, [students] can actually see that data; there’s a display downstairs that shows the seismic data and how the floors are actually moving.”

The data are also recorded and can be made available to students or faculty. “Most of us view an earthquake in a negative way, but one faculty member here gets very excited. He runs to the data,” Barlow laughs.

Solar panels are installed on the roof, and data on how they perform in Alaska during the summer versus during the winter is also available.

Innovative and Energy Conscious

Another feature of the building is a renewable heat generator. Riggs says that heating on the first floor is radiant, in-ground slab heating. There are several large equipment items, such as hydraulic pumps, that generate heat, “and that excess heat is actually returned to the radiant floor heating,” she says. Riggs says that in terms of energy conservation, all of the lights are equipped with occupancy and light sensors, so they only ever put out as much light as is needed.

Another sustainable aspect of the building is the elevators. Barlow explains that a modification in the elevator’s motors allows them to both use and generate electricity. While they use electricity to travel up, when traveling down they generate electricity, which is then returned to the building system, Riggs says. Barlow acknowledges that, although “costs for this technology are sometimes an issue, if energy costs are high enough, as they are in Alaska, it makes sense to do those kinds of things,” he says.

Riggs adds that the building itself is extremely energy efficient as far as insulation, “and the roof has an extremely high R value; I think that’s probably one of the biggest gains right there as far as conserving heat and gas,” she says.

One of the building’s innovative systems is home grown—a snow melt system designed by a UAA faculty member is installed in the sidewalk of the building’s front entrance. It’s a patented system that uses carbon fiber tape embedded into the concrete slab. “It’s a bit of a challenge because it’s a new technology and we’re still working out a few kinks here and there, but it’s a neat project,” Riggs says.

And perhaps one of the simpler, but no less awesome, design concept ideas is the open staircase meant for dropping things.

Students can access a side of the stairs that allows a clear drop from the fourth floor down to the first, with access from every

Alaska Business Monthly | March 2016 www.akbizmag.com

Photo by Phil Hall, UAA Photographer

Students in the gathering area at the new Engineering and Industry Building at the University of Alaska Anchorage.

level, so students can gather data from dropping objects from various heights.

The new building has been designed with adaptability in mind, as well. Barlow says that the gas and power systems leading into all of the lab spaces are flexible, allowing them to be modified with relative ease and little expense if the needs of the college change over time.

New Tech

Technology has been integrated into every room in the building, with many classrooms equipped with computers, and most of the lab and classroom spaces have builtin projectors, screens, and computer systems. “This is a state-of-the-art facility that allows us to do distance education,” Barlow says. “We can have individuals at various off-site locations on monitors” in the Elearning classrooms. These rooms are also equipped with microphones and cameras that follow motion and sound, meaning they will automatically focus on whoever is speaking. Lectures in these rooms can be recorded, and this presents the opportunity for long distance learning as well as a study material for students to access.

A control room is situated between two of the E-learning classrooms. If necessary, an operator can sit in that room and address any issues that may arise as the technology is being utilized. “Teaching a class a job in itself; you don’t want to be trying to make technology work at the same time.

This allows faculty members to just focus on their teaching,” Barlow says.

Labs and More Labs Aside from the strong-floor lab, the building www.akbizmag.com

is equipped with several specialized labs to allow students an opportunity for handson learning. One is the cold lab, monies for which were donated by Ted and Gloria Trueblood. It consists of two large, walk-in freezers. Barlow says, “We can store samples, or machine cold samples, allowing us to investigate frozen soils without thawing them.” There’s a construction materials lab, which includes cement mixers in a mixing room and a curing room that’s capable of controlling temperature and humidity as samples cure. Across the hall a lab contains impact testers, a machine that does tensile and compression tests, and a specialized machine that can do compression tests in a temperature-controlled chamber.

The pavement lab has equipment for mixing asphalt and pavement, as well as machines that simulate road wear with various attachments, including those that behave like a tire with or without studs.

There’s a fluid mechanics lab with a fortyfoot flume that can be filled with water, allowing students to gather erosion information or to test small scale hydroelectric projects. That lab contains a wind tunnel, allowing research into wind power.

All in all, the building has been welldesigned and well-constructed by a team of more than thirty contractors and subcontractors led by general contractor Neeser Construction, Inc. and design consultant Livingston Slone, Inc. Barlow says, “It’s a fabulous team, and we’re very pleased with them.”

R Tasha Anderson is an Associate Editor at Alaska Business Monthly.

March 2016 | Alaska Business Monthly

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special section

Building Alaska

Statewide Construction Roundup

A

By Russ Slaten

s winter turns to spring and the ice begins to melt, building and road projects across Alaska resume.

Some projects work through the winter, but some aren’t possible without the cooperation of ideal weather and temperatures.

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Photo by Katie Chan/R&M Consultants, Inc.

Northern and Western Alaska

The $12 million Harold Kaveolook School Gymnasium Addition in Kaktovik, about 120 miles east of Prudhoe Bay, began a year ago in March 2015. The 16,150-square-foot addition includes a new entry, gym, locker rooms, restrooms, concessions, reception area, storage, and a mechanical room on the main floor, along with a weight room, fan room, and suspended running track on the mezzanine. General contractor UIC Construction expects to complete the North Slope Borough project by the end of December, with twenty-five employees at peak construction. The gymnasium addition was designed by Burkhart Croft Architects.

The more than $943,000 Barrow Emergency Operations/Joint Training Center Renovation, Phase I, began in January. The 3,000-square-foot renovation project was designed and engineered by CH2M. Cornerstone General Contractors expect to complete the North Slope Borough project next month.

The $26.6 million Nome Airport Runway Safety Area and Apron Improvements project was originally awarded in October 2013.

The Alaska Department of Transportation and Public Facilities (ADOT&PF) project includes constructing runway safety areas for runways 3-21 and 10-28 and reconstruction of the south terminal apron area and north side cargo apron. ADOT&PF expects Quality Asphalt Paving to complete the project in late 2016.

The $42 million Dalton Highway MP397414 Reconstruction project at Deadhorse began April 2015. Brice, Inc. expects to complete the eighteen-mile ADOT&PF road project in September, with one hundred workers at peak construction.

The $10 million Dental Clinic and Administrative Offices project on the Kanakanak Hospital campus in Dillingham is about 55 percent complete, according project architect Livingston Slone. The two-story, 15,800-square-foot building is enclosed and heated for winter. General contractor Roger Hickel Contracting will

Sandstrom & Sons setting a 125-foot-long concrete bulb-tee girder for the Eklutna River Bridge Replacement project.

resume work at full pace with the first spring barge. BESC provided civil engineering, PND provided structural engineering, and RBA Engineers provided mechanical and electrical engineering for the Bristol Bay Area Health Corporation project.

The Interior

Kiewit Infrastructure West Co. will build the $23 million Parks Highway Grade

Separation between Montana Creek and Sunshine near Talkeetna Spur Road as part of the Alaska Highway Safety Improvement Program. The ADOT&PF project, designed

by PND Engineers and with R&M Consultants as the independent quality firm, consists of two 0.75-mile long overpasses spanning the railroad. The project begins in February and is expected to be complete in October.

Alaska Business Monthly | March 2016 www.akbizmag.com

The $5 million to $15 million Peger Road Resurfacing and FMATS Pedestrian Improvements consist of 4 miles of road resurfacing and 8,600 feet of pathway in Fairbanks. The ADOT&PF project, designed by R&M Consultants and still without a general contractor at press time, is expected to begin construction in February and to be completed in October.

The $12.1 million Eielson Bowling Center at Eielson Air Force Base underwent construction March 2015. General contractor Bethel Federal Services expects to complete the 17,124-square-foot building in November. The US Air Force project was designed by MCG Architects.

The $44 million Mechanical/Electrical Building for the US Army Corps of Engineers at Fort Greely, about one hundred miles southeast of Fairbanks, is about 85 percent complete this month, according to Watterson Construction. Testing commenced at Fort Greely Missile Field 1 in late January. Watterson will complete the project this summer with seventy workers at peak construction.

In December 2015 Brice Environmental began installing 16,000-cubic-yards of rip rap for the $8.1 million Galena Ring Dike Protection project, located about 270 miles west of Fairbanks. Brice, a subsidiary of

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Calista Corporation, expects to complete the US Department of Agriculture Natural Resources project in April, with fifty workers at peak construction.

Brice, Inc. began the Doyon Limited Toghotthele #1 Test Well Access Road and Drill Pad project located in Nenana this January. The 1.7-mile road and 500-cubicfoot pad was designed by Recon LLC. Brice expects to complete the Doyon Limited project this month, with thirty workers at peak construction.

Southeast Alaska

The $16 million Harrigan Centennial Hall Renewal in Sitka began September 2015.

The joint venture of Dawson-McGraw expects to complete the 28,000-square-foot renewal in December. The City and Borough of Sitka project was designed by MCG Architects.

The $12.5 million Yakutat Airport Runway Pavement Rehabilitation project was awarded to Knik Construction in September 2015. ADOT&PF expects the project to be completed in late winter 2016 or early 2017.

The $3.5 million Glacier Highway Pavement Rehabilitation–Point Lena to Tee Harbor project in Juneau was awarded to Secon, owned by Coalaska, Inc., in Decem-

ber 2015. Secon will widen the nearly twomile stretch of road to safely accommodate pedestrians, bicyclists, and vehicle traffic.

ADOT&PF expects the project to be completed this summer.

The $1.05 million Elfin Cove Outer Harbor Improvements project located about fifty miles west of Juneau was awarded to Trucano Construction in October 2015.

Trucano will furnish and place new timber mooring and seaplane float structures, driven pipe piles, and a new aluminum gangway and work on associated electrical improvements. ADOT&PF expects project completion this fall.

Southcentral Alaska

Alutiiq Pacific LLC began construction and weather radar instrumentation upgrades in September 2015 for NOAA Wind Profilers in Talkeetna, Anchorage, and Homer. The National Oceanic and Atmospheric Administration project saw about ten workers per site and is expected to be complete in August.

The $63 million Kodiak High School improvement project was completed in December 2015 with Watterson Construction finishing up owner-generated change orders for building siding in January. The Kodiak Island Borough project saw 77,000

March 2016 | Alaska Business Monthly

29

Building Alaska’s Future with Alaskan Products

square feet of new construction and 90,000 square feet of renovations to the high school, with sixty-seven workers at peak construction.

The $9.5 million Alaska Vocational Technical Center Renovation and Addition project in Seward was in closeout in March at about 90 percent complete, and Watterson expects to complete it by summer.

Watterson began the Alaska Department of Labor and Workforce Development project last summer, with twenty-five workers at peak construction.

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The $12 million Wasilla Public Library will see Cornerstone General Contractors installing unitized curtain wall panels until mid-March. Cornerstone will also start installing finishes on the interior portions of the building including the concrete fireplace surround tape and paint, all custom wood work, and floorings. The new 23,380-square-foot City of Wasilla project saw commissioning start in early March, and in April the team will continue the exterior hardscapes and site lighting before it hands over the keys on June 1. The project was designed by ECI/Hyer with mechanical and electrical engineering provided by AMC Engineers, with sixty workers at peak construction.

The $42 million Parks Highway MP 44.5 to MP 48.8 Reconstruction project from Church Road to Pittman Road began in November 2015. The ADOT&PF project upgrades the existing two-lane road to a fourlane divided highway with at-grade intersections every half mile and full-length lighting. Frontage roads and pedestrian pathways will be reconstructed and relocated along the length of the project with a new bridge over the Alaska Railroad.

ADOT&PF expects Knik Construction to complete the project in summer 2017.

The two-phased, 3.6-mile Bogard Road Extension East with separated pathways in Palmer provides an additional east-west traffic corridor for moving traffic through the core area of the Matanuska-Susitna Borough. Both borough project phases were designed by DOWL and are expected to be complete in June.

Scarsella Brothers, Inc. began the $20.4 million Bogard Road Phase I project from the Glenn Highway to Palmer High School in August 2014, with about forty workers at peak construction.

Ahtna began the $7.9 million Bogard Road Phase II project from Palmer High School to Colony Middle School last June, with about thirty-five workers at peak construction.

The $6.9 million Mack Road Extension

Alaska Business Monthly | March 2016 www.akbizmag.com

in Wasilla upgrades and extends about 2.5 miles of Mack Road between Knik-Goose Bay Road MP 4 and the Parks Highway MP 44. The joint Matanuska-Susitna Borough and City of Wasilla project, designed

by HDL Alaska, began last July. Bristol Environmental completed the project in November, with thirty employees at peak construction.

The $9 million, 1.3-mile South Trunk Road Extension at the south interchange of Trunk Road and the Parks Highway began in September 2015. Lounsberry and Associates designed the project that extends Trunk Road south to Nelson Road and includes a six-leg roundabout and multi-use pathway. Granite Construction expects to complete the project in December.

In and Near Anchorage

The $10.1 million Eklutna River Bridge Replacement near the Thunderbird Falls exit off the Glenn Highway began in June 2015 and will be complete this June. Sandstrom & Sons, Inc. will complete the 45-foot wide by 250-foot long two-lane bridge for the Municipality of Anchorage. Project manager R&M Consultants designed the roadway, and ADOT&PF designed the bridge.

The $24 million Rasmuson Wing/East Wing Expansion at the Anchorage Museum in Downtown Anchorage saw Davis Constructors beginning in February with light exterior demolition. The 25,000-squarefoot project was designed by MCG Architects, and Davis Constructors expects to complete it by September 2017.

The more than $984,000 Residence Inn Anchorage Midtown Pool Renovation is expected to be completed this month. Cornerstone General Contractors began the 6,000-square-foot project, owned by NMS Lodging, in November 2015. The renovation was designed and engineered by WHPacific.

Cornerstone General Contractors completed the $15.4 million West High Romig Middle School CTE Addition and Renovation in December 2015. The two-story, 27,000-square-foot addition to West High saw the addition of fifteen new classrooms, and 8,500-square-foot of work to Romig saw the addition of three new classrooms and three renovated classrooms. The Anchorage School District project was designed by Kumin Associates, with civil engineering by DOWL, structural engineering by Schneider Structural Engineers, hazardous materials engineering by EHS Alaska, and mechanical and electrical engineering by RSA Engineering.

The $16.7 million Airport Heights Elementary Renovation and Addition in East Anchorage was about 50 percent complete www.akbizmag.com

in March, according to Watterson Construction. Renovations continue for the Anchorage School District project, and Watterson expects to complete it by this summer, with fifty workers at peak construction.

Body Renew, BurgerFi, and Krispy Kreme at Creekside in East Anchorage broke ground in fall 2015. The shell of the 21,000-square-foot retail building is on schedule to be about 80 percent complete in March, according to Pfeffer Development. In April the tenants will start tenant improvements while the exterior concrete, paving, and landscaping for the project will be finished. Design-builder Neeser Construction expects the three businesses to open this summer. Creekside is owned by Jerry Neeser, Mark Pfeffer, and Chignik Lagoon Native Corporation; it was designed

by KPB Architects.

UNIT Company broke ground last June on Creekview Plaza 49 in East Anchorage on Muldoon Road just north of Debarr Road. The two-building, forty-nineunit apartment complex is scheduled for phased completion beginning this June.

Each three-story building, designed by KPB Architects, will offer fully-accessible independent senior rental housing for residents aged fifty-five years and older, with low- and modest-household incomes.

One building will be mixed-use with retail space available on the first floor. The project is a joint venture between Cook Inlet Housing Authority, Jerry Neeser of Neeser Construction, and Mark Pfeffer of Pfeffer Development.

U-Med District

The $19.2 million University of Alaska Anchorage (UAA) Existing Engineering Building Renewal project is about 40 percent complete and will be available for occupancy this July, according to Neeser Construction. The exterior of the threelevel, 40,000-square-foot building has been weathered in for the winter and work on interior framing and mechanical and electrical systems rough-in is currently underway. The UAA project was designed

by Livingston Slone, with engineering services provided by AMC Engineers, Reid Middleton, RFD, Sextant Group, and Ayres Saint Gross.

The $15.3 million UAA Parking Garage, which includes modifications to Mallard Lane and construction of a skybridge to the Existing Engineering Building, is about 85 percent complete this month and will be available for occupancy this July, according to Neeser Construction. The majority of the four-story, 471-stall concrete structure is currently in place, and the project will

be put into winter mode until spring when the remaining exterior work can be accomplished and the final paving installed.

Work on the skybridge connecting to the Existing Engineering Building will continue concurrent with existing engineering renovations. The UAA project was designed and engineered by Livingston Slone, Reid Middleton, AMC Engineers, DOWL, CRW Engineers, and Corvus Design.

The $1.3 million UAA Bookstore Renovation was completed last month by F&W Construction. The 14,480-square-foot renovation began August 2015 and was designed by MCG Architects.

U-Land LLC, a special purpose entity managed by Pfeffer Development, has a multi-phase development agreement with Alaska Pacific University to develop their endowment lands, with the first project being the Alaska Pacific Medical Center located near SpringHill Suites on University Lake Drive. Criterion General is scheduled to break ground this spring, and the core and shell would be completed at the end of 2016, with the first lease holder moving into the third floor into a 12,000-squarefoot space. The three-story building was designed by KPB Architects, with space for lease on the 10,000-square-foot first floor and 12,000-square-foot second floor.

Completion of the project is market-driven, Pfeffer Development says.

South Anchorage

The $2.1 million Alaska Zoo Polar Bear Exhibit improvement is set to be complete this summer. Watterson Construction has completed the bulk of concrete work and the project is about 55 percent complete. Watterson will continue work in the spring, with fifteen workers expected at peak construction.

The $8.4 million Rabbit Creek Elementary School Renovation and Addition project in South Anchorage is continuing at about 40 percent complete. Watterson Construction began the Anchorage School District project last summer and expects to complete it this summer, with forty-five workers at peak construction.

The $6 million West Dimond Boulevard Upgrade in Anchorage began last October and is expected to be complete this October. Quality Asphalt Paving will build 1.3 miles of roadway, including curb and gutter; separated multi-use pathways; and two single-lane modern roundabouts. The Municipality of Anchorage project was designed by R&M Consultants.

R Russ Slaten is an Associate Editor at Alaska Business Monthly.

March 2016 | Alaska Business Monthly

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special section

Building Alaska

Alaska Laborers Apprenticeship Program

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Alaska Business Monthly | March 2016 www.akbizmag.com

Training construction workers with a variety of skills

By Rindi White

F

rom road construction to building new sewer and water utility lines, construction of new vertical buildings to building pipelines for gas and oil, the Alaska Laborers union supplies workers around the state. Recently, Alaska Laborers’ apprentices have had an important job—building their own training schools in Fairbanks and Chugiak.

Keeping a Ready Workforce

Like many other unions, Laborers is facing a deficit of workers when baby boomers retire in the coming decade. However, through its apprenticeship training program, the union is working to replenish its ranks and keep a trained labor force at the ready for large projects.

The Alaska Laborers Training School serves two union organizations—the Fairbanks-based Laborers Local 942 and the Anchorage-based Laborers Local 341. The school operates training facilities—both of them newly built—in both locations. The school also has apprentices who work in Southeast Alaska but travel to Anchorage for the four-week training period.

Each year, between 200 and 240 people apply for fifty to sixty spots in the Laborer’s Training School, says Anchorage Apprenticeship Coordinator Mike Piekarski.

“Basically the projected work dictates how many brand-new apprentices we take in,” he says.

The training school is funded by contributions from contractors, so apprentices don’t have to pay out-of-pocket for the training. The contribution amount is specified by collaborative agreement between the contractors and the union hiring hall, Piekarski says, adding: “It’s a benefit for certain jobs.”

A Grateful Apprentice

Third-year apprentice Kyle Colvin says becoming an apprentice has been a blessing to him, one he shares with his family and friends.

Alaska Laborers Union Apprentices learning multi-plate excavation.

Courtesy of Alaska Laborers Union

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March 2016 | Alaska Business Monthly

33

Alaska Laborers Union Apprentices learning sandblasting.

Photo courtesy of Alaska Laborers Union

Colvin graduated high school in 2012 and, like many recent graduates, was taking part-time jobs for minimal pay. A family friend who is an Alaska Laborers member called him and suggested the apprenticeship program. It was a good choice for someone who liked to work, the friend said.

For Colvin, it’s been a blessing.

“There’s not a lot of twenty-one-yearolds who have the best medical benefits, the best dental, and who get paid really well,” he says. “I’m making way more [money] than anybody I know right now, which is something I’m proud to say.”

Colvin says it’s neat to feel like he’s part of something bigger than just himself— having the opportunity to work on projects

that will last for generations.

This winter, Colvin was thankful for the apprenticeship for another reason. He tore the labrum on his dominant shoulder, an injury that sidelined him until he could get surgery and promised to sideline him at least another couple months afterward. But unlike a lot of twenty-one-year-olds, he has medical insurance that covers much of the bill. And he has the money to pay the outof-pocket medical costs, too, he says.

“We get paid very well for what we do, but it’s a lot of hard work. I don’t mind the hard work because it’s worth it,” he says.

Photo courtesy of Alaska Laborers Union

Teaching on Their Home Turf

Alaska Laborers Union Apprentices learning asphalt work at the Alaska Zoo alongside Alaska Laborers.

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The Laborers Training School is slightly different from other unions in that it teaches apprentices a broader scope of skills. On a job site, laborers might be responsible for several types of jobs, including erecting scaffolding, pouring concrete, drilling and blasting, plotting road courses, and erosion control.

Getting each apprentice through the apprenticeship while also giving them a solid base of knowledge in each disparate field can be a challenge, training school officials say.

“In an ideal world, we’d like to give everyone equal [time] in all those facets, but the reality is, the apprentice will get the most experience where there is work.

However, we do try to ensure they are wellrounded in job experiences and training,”

Alaska Business Monthly | March 2016 www.akbizmag.com

says Suzanne McCarthy, Alaska Laborers Training School statewide coordinator.

In 2015, for example, McCarthy says there was a lot of road construction and apprentices were able to get in a significant amount of training in that field. Perhaps another year will have more pipeline-related work or more utility work.

Two projects important to the union have helped apprentices gain a variety of needed skills—the construction of two new training schools in Fairbanks and Chugiak.

The new Chugiak school site provided excellent training opportunities over the past three years. On a ten-acre site, it’s has three classrooms equipped with SmartBoards and Winked walls (erasable whiteboards). The facility has computerized training that helps apprentices learn about site-plan modeling, software programs for temporary traffic designs and mapping out grade and elevation on projects. The facility also has two large shops, one of which has a dirt floor so students can practice digging, trenching, and other operations during the winter months.

To accommodate Laborers attending training from other regions of the state, the Chugiak school can sleep twenty-six stu-

dents and has an on-site kitchen and dining hall that seats up to forty-eight students at a time. But one of the most beneficial aspects at the new facility is space. With ten acres, the school can offer several different skills-based trainings and scenario set-ups at the same time.

Apprentices also worked to build a new school at the Laborers Training School’s Fairbanks location. The school is an addition to existing training facilities. McCarthy says the two-story building is about 15,700 square feet, plus a 5,600-squarefoot shop/classroom building and a second 6,000-square-foot shop—all on the roughly three acres.

This Year’s Application Deadline Looms McCarthy says the school is gearing up for its 2016 interview process. “While we accept applications year-round, the deadline for this season is set for March 31,” she says.

“Individuals seeking an apprenticeship for this year should apply before that time.”

Those who are selected will be trained and put to work during the coming construction season.

Once an apprentice candidate is selected

for the program, they go on the work roster and are placed on a construction job when work becomes available. Apprentice wages start at 60 percent of journeyman Laborers’ wages (currently $29.79 an hour), Piekarski says. Apprentices are reviewed and evaluated after one thousand hours or work, resulting in a 10 percent wage increase— provided they keep yup with training and are satisfactorily increasing their skill level.

“We look for evaluations from their experience on the job to help determine whether they get their pay increase,” Piekarski says.

Both schools employ four people as staff/instructors and have a roster of journeymen who come in to teach part-time, generally for one to three weeks at a time.

Training is a critical part of ensuring the workforce is highly skilled and qualified for work, McCarthy says. The schools provide both skill-based training and industry certification that allows apprentices and other union members to come in and complete classes for needed certification.

Members are not charged for training, says McCarthy, adding, “They might not have to make a payment, but they have to make a commitment.”

R

Alaska Laborers Union Apprentices learning rigging and hoisting.

Photo courtesy of Alaska Laborers Union

www.akbizmag.com

March 2016 | Alaska Business Monthly

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special section

Building Alaska

Construction Workforce Training Providing skilled workers throughout Alaska ecoming a trade apprentice doesn’t require joining a union. In fact, around 340 Alaskans are currently working their way through an apprenticeship via merit-based Associated Builders and Contractors of Alaska (ABC), which incorporated in 2000 as the result of a dispute over bidding in Fairbanks. Non-union contractors wanted to be able to bid on equal footing with union contractors, so a group of non-union contractors incorporated to form an Alaska chapter of the Associated Builders and Contractors of America. ABC of Alaska is part of a national organization with more than twenty-two thousand members and more than seventy chapters worldwide.

“Our membership hovers around 140 businesses, with a retention rate of about 88 percent,” says Amy Sibert, ABC of Alaska president. Apprenticeship training began ten years ago, Sibert says. She wasn’t there at the time, but says it took a lot of hard work and belief in the future success of the program to get the training effort off the ground.

ABC offers training in a variety of fields: carpenter, electrician, electronic systems technician, heating and air conditioning installer/servicer, construction painter, plumber, sheet metal worker, pipe fitter, construction craft laborer, powerline distribution erector, glazier, operating engineer, sprinkler fitter, and insulation worker. They hope to add welding to the list this year, says ABC apprenticeship coordinator Emily Evans.

Apprenticeships through ABC are slightly different than those through union organizations. Applicants go through an interview process held every two weeks and then are added to an applicant list. Instead of being selected for an apprenticeship, they’re ranked in the interview according 36

Courtesy of ABC of Alaska

B

By Rindi White

Associated Builders and Contractors of Alaska Apprentice Dan Kollmeyer.

to applicable experience and other factors and their name goes on an applicant list.

When a member company needs an employee, applicants get selected from the list and their apprenticeship begins.

“The [people on the] applicant list generally have zero work experience,” Sibert says.

Once an applicant is selected for a job, their training and schooling can begin.

ABC’s apprenticeships are a mix of on-thejob training and classroom instruction. On the job, apprentices are paired with journeymen who monitor closely the skills they are learning.

“It’s a one-to-one ratio of journeyman to apprentice,” Sibert says.

The journeyman knows what level the apprentice is on, she says, and makes a point to work on the specific skills related to that level of training. Employers play a part, too, by placing apprentices where they can work on the skills they’re studying.

Each apprentice goes through about 680

hours of classroom instruction. The instruction is strictly bookwork and testing.

Apprentices can work through their textbooks at home and come in to the ABC site or to local job centers to take each section’s written test.

“Everything is self-study—it’s all done on their own,” says Amber Cartier, director of apprenticeships for ABC of Alaska.

Allowing apprentices to work on their own means employees don’t have to give up valuable work time to take classes, she says.

But that doesn’t mean they’re out of touch with program administrators.

“We’re always here for anyone who calls in, either for a member company or an apprentice who needs a little extra push getting their work done,” Cartier says.

It generally takes four years for apprentices to complete the program, she says, provided the apprentice stays on top of what they’re supposed to be doing. That’s about eight thousand hours plus the classroom training. Construction work is typi-

Alaska Business Monthly | March 2016 www.akbizmag.com

cally seasonal, so apprentices aren’t penalized if they aren’t working a portion of that time. They can still study and take tests until they are rehired, Cartier says.

Like union apprenticeship programs, ABC apprentices earn a percentage of the wage of a journeyman worker, beginning at 50 percent for entry-level apprentices.

One Apprentice’s Self-Determination Apprentice John Moss is working through the last few months of an electrical apprenticeship through ABC. Moss, who recently turned forty, is not the average apprentice.

He’s been part of two unions previously— he spent eleven years as a member of Alaska Laborers Local 341 and also worked as an equipment operator with Alaska Operating Engineers; however, he wanted to learn a trade that would take him into retirement.

Moss says he considered applying for an apprenticeship through the International Brotherhood of Electrical Workers but was put off by the estimated six-month wait he was told he’d have before an interview and also by the requirement that apprentices be out of work for training up to seven weeks a year.

“My priorities were getting a good-paying job and providing for my family,” he says.

He says he knew he’d be taking a pay cut by going through an apprenticeship program, as entry-level electrical apprentices earn less than he was making in the construction field. But it was worth it to learn a new trade, he says.

In two months, Moss was interviewed and being called up for work. He had to turn down two North Slope jobs because at the time, he needed a job that would keep him near his family. But he soon found a position with Samsung Electric and worked with them for four years. He recently went to work for Udelhoven on the North Slope. He says he’s been really pleased with the mentors he’s had during his apprenticeship so far.

Moss says he has “great praise” for ABC. Union apprenticeship programs might have more money invested in them, he says, but some of the benefits he has as a non-union employee is that he doesn’t have to pay union dues or contribute part of his paycheck to a training fund. He also gets full control of his retirement, instead of relying on a group pension.

Nationally Certified NCCER Training ABC of Alaska offers training through the National Center for Construction Education and Research, or NCCER. It’s a na-

tional nonprofit education foundation that develops standardized construction and maintenance curriculum and assessments and offers credentials that can be transported from state to state through NCCER’s online registry.

ABC accepts transfers from other apprenticeship programs, provided the apprentice has evaluation forms and transcripts of book-work accomplished so far.

It’s not uncommon for them to take on apprentices who have transferred from AVTEC, the state-run vocational and technical school in Seward, or from King Career Center in Anchorage, the University of Alaska Anchorage, or even the Department of Corrections.

In addition to apprenticeships, ABC of Alaska does certification training, such as a federal Occupational Safety and Health Administration ten-hour course often required for employees. Certification courses are all handled online, Cartier says, and they’re free.

While apprentices and others who take the certification classes all get written certifications, a second step NCCER provides is entry in its national register. That requires a second level of evaluation—a performance evaluation, Cartier says. ABC previously offered performance evalua-

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March 2016 | Alaska Business Monthly

37

Courtesy of ABC of Alaska

Preparing Workers with Basic Construction Training While hundreds of Alaskans are taking part in apprenticeship programs each year, for some residents an apprenticeship is more of a commitment than they need.

Perhaps a high-school graduate seeking a career path needs to first learn more about the field he or she is interested in before deciding if that’s the best choice. Or maybe an electrician could boost his or her skills by learning how to weld.

That’s where Alaska Construction Academies (ACA) comes in. The group offers free basic construction training in Anchorage, Mat-Su, Fairbanks, the Kenai Peninsula, Juneau, and Ketchikan.

Started to Fill a Shortage

Associated Builders and Contractors of Alaska Apprentice Sinakone Phonsarang.

tions and is preparing this year to begin offering them as part of their training curriculum again. Cartier, who recently got certified to do performance evaluations herself, says that should be in place in the next six months.

“We need to get more performance evaluators on board,” she says.

The performance evaluations allow people taking classes through NCCER to be listed on a national registry, giving their work credentials portability around the nation to any job that recognizes NCCER certifications.

Cost Covered

by Most Employers Like other apprenticeships in the state, the cost of training is generally free for apprentices—save for the $50 application fee that pays for entry into the program and the initial interview process.

“We started a trust about five years ago,” says Sibert. “The money from the employer goes into a trust to pay for our certification classes.”

About 90 percent of employer members cover the cost of the apprentice training, she says. That’s the $165 placement fee and $95 per month, per apprentice going through the program.

In the five years that Sibert has led the organization, the apprenticeship program has grown from about 100 apprentices to the 340 going through the program currently.

Sibert says they hope to expand the program further, and to one day build a training center. She says they’ve come a long way for a program that, when it was created, no one believed would succeed, adding: “We’ve worked really hard to improve the program.”

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The leaders of Associated General Contractors of Alaska (AGC) created the group in 2006 in an effort to train more people for the residential construction industry. At the time, building contractors were having a hard time finding skilled workers because schools had cancelled industrial arts classes, parents weren’t pushing their children to work in trades, and young workers were entering the workforce without knowledge of how to read a tape measure or use power tools.

ACA provides both high school and adult education by contracting with school districts to teach high school students and by working with industry trainers to provide adult education at communities around the state.

“What we’re doing is primarily funding pre-apprenticeships,” says ACA Executive Director Kathleen Castle.

Castle says 2015 was a record year for ACA. There were about 500 adults in classes around the state, she says, and between 5,500 and 6,000 high school students who took a construction-related class.

Building Better Applicants

ACA has a $225,000 contract with the Anchorage School District to help provide construction courses in the district’s grade 9-12 program. The district’s King Career Center has an electrical class and a carpentry class this year, Castle says. Students finish the class with credit through NCCER. “A person who comes out of a high-school program with some NCCER background can then articulate that,” Castle says.

She explains that the student could go to AVTEC, the state-run vocational and technical school in Seward, or could apply to ABC of Alaska to enter their apprenticeship program and they’d get credit for the classes they’ve already completed.

“We also have articulation agreements with a couple of the union apprenticeship programs to give extra points on their application

for students who come to them with NCCER [courses] already on their card,” Castle says.

The students might have already taken courses in tool identification, construction math, or other basic skills.

“It kind of helps build the foundation for the tools they would need,” she says.

Training and Re-Training Adults

ACA also partners with Alaska Works Partnership to teach construction-related courses such as welding, drywall, and electrical, as well as short-term certifications such as the ten-hour federal Occupational Safety and Health Administration class some employers require, or forklift safety certification.

The instruction is funded by the state, Castle says. Adults have to apply to take a course or certification, and must supply a resume, take a basic math test, and, once a slot in the training program becomes available, they must pass a drug test. Castle says the average age of adults taking ACA courses is thirty-four.

“We have a real variety of people who apply for our adult classes,” she says. “Maybe someone from the food industry wants to do something different or maybe someone in the welding field wants to learn more electrical skills.”

Training for Rural Alaskans

AGC President John MacKinnon says ACA has partnered with the state to fill some training niches that make it easier for rural Alaskans to do their jobs.

Two years ago, the state partnered with the Operating Engineers Local 302, the Alaska Department of Transportation and Public Facilities (ADOT&PF), and the Denali Commission to offer week-long training sessions for ADOT&PF contractors who maintain rural Alaska airports.

The state has around 250 airports and many are in villages. The rural airports are generally maintained by a single person who contracts with ADOT&PF to plow snow in winter and maintain the runway yearround, using ADOT&PF equipment to do so.

The contractors were invited to the Fairbanks Pipeline Training Center for an intense training session that focused on equipment operation and maintenance, MacKinnon says.

“It was a very successful program. During the course of this, the dozens of people who have been trained are now available to work on local construction projects,” he says.

The training was paid for through Denali Commission funds, which have since dried up. But people who went through the training have since been able to get work with road contractors or other construction crews that work in their area.

MacKinnon says ACA training is ideal for adults living in rural Alaska who want to im-

Alaska Business Monthly | March 2016 www.akbizmag.com

prove their marketability for seasonal construction work in their area. They wouldn’t have to spend a lot of time training outside their village, and many construction crews make exceptions for hiring journeymen workers when they’re working in a rural area.

“A registered apprenticeship program is very important, but it’s also important that we have these other avenues where people can work on a job but [don’t have to be] registered journeymen,” he says.

AGC has fought the requirement for registered journeymen to fill positions in cases where work is being done in rural areas on the grounds that going with skilled workers instead allows for maximized local hire.

The Need Is Great but Funding Is Down Castle says those who go through ACA training are generally employed after their training is done. Between 2007 and 2013, she says, the state invested $8.5 million in construction training for 2,200 adults. In 2014, 72 percent of the adults who went through the training were employed.

However, the state is facing a fiscal crisis, and legislators are looking for places to cut spending. ACA’s contract with the state in 2016 is pegged at $2.4 million, but Castle and other supporters will be working hard

to keep funding available for the program.

Just as important as continued education investment is continued investment in construction projects, says MacKinnon.

He predicts that Alaskans will see a decline in building construction, but a somewhat smaller drop in state and federally funded “horizontal” construction such as roads and sewer lines. Bids are becoming more competitive, he says, a sign that more companies are looking for work.

“A job that would have only attracted six bidders now will have twelve or fourteen,” he says. “We may even see a shakeout, with some companies no longer being around.”

MacKinnon says when the economy tanked in the United States in 2009, many people within reach of retirement age left the industry. Some got trained in other careers, while others simply retired. Younger people who lost construction-related jobs by and large got trained in other fields, he says. Now, more than a dozen regions of the nation are experiencing “very severe” worker shortage, he says.

If the state continues to shrink its capital budget, he says, Alaska may be facing some of the same issues soon.

“Last year was the lowest capital budget in ten years. I think we need to maintain some of our efforts to restore the capital budget,” he says. “The greatest shortage

is going to be on the building side. What the administration and legislature need to do is come out with a significant deferred maintenance package. We have state facilities all over that are continually aging.”

Investing in existing infrastructure, MacKinnon says, will employ workers and also help keep the state’s real estate investment intact.

When building maintenance is continually deferred, he says, the cost of performing the maintenance increases significantly.

MacKinnon suggests smaller projects, such as doing energy improvements in buildings that haven’t had them yet, could pay off for the state through reduced energy bills. But not taking action—simply trimming the capital budget to the bone—will have a ripple effect through the state economy, he says. AGC’s recent annual construction forecast pointed out that the Alaska construction economy is a big part of the state’s overall economy.

“We’re eighteen thousand people with an average salary of about $75,000 a year,” MacKinnon says. “It’s definitely a piece of the economy, and if we let it go [by not funding projects] it’s going to hit us in a few years.” R Rindi White is a freelance journalist living in Palmer.

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March 2016 | Alaska Business Monthly

39

special section

Building Alaska

Dear Alaskans, The Construction Industry Progress Fund (CIPF) and the Associated General Contractors of Alaska (AGC), proudly offer the 14th consecutive Alaska Construction Spending Forecast as a guideline to construction activity and its effect on the 49th State.

Under a special arrangement with the Institute of Social and Economic Research (ISER) at the University of Alaska Anchorage, Scott Goldsmith and Pamela Cravez have again compiled and written the Forecast.

The forecast reviews construction activity, projects, and spending by both the public and private sectors for 2016.

CIPF and AGC are proud to make this publication available annually and are confident it provides useful information for many of you.

We recognize in these times of economic uncertainty there is a likelihood of reduced construction activity, and some of this information contained herein may change.

The construction trade is Alaska’s third largest industry, paying the second highest wages, employing nearly 18,000 workers with a payroll over $1 billion. It accounts for 20 percent of and contributes $7 billion to Alaska’s economy. The construction industry reflects the pulse of the economy, and when it is vigorous so is the state’s economy. Therefore, it is imperative to keep building and repairing necessary infrastructure laying the groundwork for the future.

AGC is a nonprofit, full service construction association for commercial and industrial contractors, subcontractors and associates. CIPF is organized to advance the interests of the construction industry throughout the State of Alaska through a management and labor partnership.

Michael I. Shaw CIPF Chairman 40

2016 Alaska Construction Spending Forecast For the Associated General Contractors of Alaska and the Construction Industry Progress Fund

By Scott Goldsmith and Pamela Cravez, Institute of Social and Economic Research, University of Alaska Anchorage The 2016 Alaska Construction Spending Forecast is published in Alaska Business Monthly with the permission of the Associated General Contractors of Alaska and the Construction Industry Progress Fund.

T

he total value of construction spending “on the street” in Alaska in 2016 will be $7.3 billion, down 18% from

2015. 1, 2, 3 Oil and gas sector spending will fall 25% to $3.1 billion from its record level of $4.2 billion last year.

All other construction spending will be $4.2 billion, a decline of 11% from $4.7 billion last year.

Private spending, excluding oil and gas, will be about $1.4 billion, down 24% from $1.8 billion last year—while public spend-

ing will decline 6% to $2.8 billion from $2.9 billion.

Wage and salary employment in the construction industry, which increased an estimated 6 percent last year to almost 18,000, will decline slightly in 2016.4 The decline in construction spending in Alaska in 2016 can be traced directly to the precipitous drop in the price of oil over the last 18 months, after the previous period of unprecedented high prices a few years earlier. In mid-2014 the price was above $110 per barrel, but as this report is being

1 Our revised projection for 2015 was $8.9 billion, higher than the original estimate of $8.5. This revision is primarily the result of higher than anticipated oil and gas spending in 2015.

2 We define construction spending broadly to include not only the construction industry as defined by the US Department of Commerce and the Alaska Department of Labor, but also other activities. Specifically, our construction-spending figure encompasses all the spending associated with construction occupations (including repair and renovation), regardless of the type of business where the spending occurs. For example, we include the capital budget of the oil and gas and mining industries in our figure, except for large, identifiable equipment purchases such as new oil tankers. Furthermore, we account for construction activity in government (like the carpenter who works for the school district) and other private industries. The value of construction is the most comprehensive measure of construction activity across the entire economy.

3 “On the street” is a measure of the level of activity anticipated during the year. It differs from a measure of new contracts, because many projects span more than a single year.

4 Alaska Department of Labor.

Alaska Business Monthly | March 2016 www.akbizmag.com

written the price has fallen below $30 for the first time in 12 years. Furthermore, the short-term outlook is for the price to remain low, or even decline further, because supply continues to outstrip demand and inventories continue to accumulate. The longer term outlook for price also continues to fall, because of the resilience of production in the face of the falling price.

The high price stimulated increases in construction spending across all sectors of the Alaska economy, particularly among oil and gas companies and the state government. The low price is now beginning to reduce construction spending within the economy, except for federal spending and spending by basic industries that benefit from lower oil prices.

So far the price drop has been felt most directly in the oil and gas sector. Although many companies announced optimistic investment programs for 2016, most, if not all, have recently announced cutbacks or postponements. The longer the price remains low, the greater the likelihood of further cutbacks in the oil patch.

Because of the oil price drop, a deficit of $2 billion opened in the state general fund in FY2014, and it has increased to $3.5 billion for each of the last two years. Although the state has been fortunate to have sufficient cash reserves to offset this revenue shortfall in the short term, it has meant a dramatic decline in new state funding for capital projects. Whereas the general fund capital appropriation in FY2013 was more than $2 billion, in this past year it was only enough to cover the required match on federal transportation grants. And looking ahead, there is very little prospect for a significant increase in the capital budget in the coming years.

But the sharp decline in the state capital budget over the last three years has so far had limited effects on construction spending. This is because it takes considerable time for appropriated funds to become “cash on the street.” Several billion dollars of capital appropriations remain “in the pipeline,” which will keep state spending from falling dramatically this year. However, the amount of construction spending will be winding down in many communities like Juneau, Kodiak, and Fairbanks (excluding Eielson Air Force Base) because of declining state spending.

Because of the size of the state budget deficit, it is possible that some projects in the pipeline that have not yet been approved could be cancelled. However, this will be moderated by concern over the negative impacts on the economy from such cancellations.

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2016 Alaska Construction Spending TOTAL TOTAL EXCLUDING OIL & GAS PRIVATE Oil & Gas Mining Other Basic Utilities* Hospitals/Healthcare* Other Commercial Residential PUBLIC National Defense Highways and Roads Airports, Ports, and Harbors Alaska Railroad Denali Commission Education Other Federal Other State and Local

Million $7,303,000,000 $4,178,000,000 $4,542,000,000 $3,125,000,000 $180,000,000 $104,000,000 $459,000,000 $195,000,000 $150,000,000 $329,000,000 $2,761,000,000 $552,000,000 $705,000,000 $387,000,000 $26,000,000 $10,000,000 $406,000,000 $253,000,000 $422,000,000

Change -18% -11% -24% -25% 0% 39% -33% -19% -23% -21% -6% 27% 0% -15% -4% 0% -13% -1% -26%

* Many projects in these categories are supported by public funds.

Source: Institute of Social and Economic Research, UAA. Percent change based on revised 2015 estimates.

higher this year. And fortunately, federal spending not related to defense—mostly consisting of grants, both to the state for transportation (roads, harbors, railroad, and ferry system) and sanitation projects and to nonprofits for health facilities and housing—is not sensitive to the price of oil.

Since 2013 the Alaska economy has underperformed compared with the national average in spite of the stimulus of high oil prices that led to record high levels of employment in the oil and gas and construction sectors. Job growth has been less than 1% annually and is forecast to be negative in 2016. State population has not increased in the last two years.

This slowdown, combined with the heightened uncertainty about the future direction of the economy, brought on by the sudden fall in the oil price, will slow new private investment—particularly in the commercial and residential construction sectors as investors adopt a “wait and see” attitude, in regard to both the private economy and the ability of the state government to deal with the deficit. The decline in private construction spending this year is also partially due to the completion of a number of large utility and hospital projects.

As in past years, some firms are reluctant to reveal their investment plans because 42

they don’t want to alert competitors; also, some have not completed their 2016 planning. Large projects often span two or more years, so estimating “cash on the street” in any year is always difficult because the construction “pipeline” never flows in a completely predictable fashion. Tracing the path of federal spending coming into Alaska without double counting is also a challenge, and, because of the complexity of the state capital budget, it is always difficult to follow all the flows of state money into the economy.

We are confident in the overall pattern of the forecast. However, as always, we can expect some surprises as the year progresses.

PRIVATELY FINANCED CONSTRUCTION  Oil & Gas: $3,125 Million Construction spending related to oil and gas will be down this year, both because of the lower oil price and completion of several very large projects.

Oil and gas is always a difficult sector to forecast because plans can and do change and because of many factors associated with weather, logistics, the availability of supplies, the evaluation of work completed, regulatory and environmental challenges, tax policy, and other operational and stra-

tegic concerns.

This year the continuing volatility and uncertainty surrounding the oil price make forecasting the spending level significantly more challenging. The short-term price decline has an immediate negative impact on cash flow of firms already producing oil, and the long-term price decline has a negative impact on the economic viability of investments in new production. Both have a negative impact on the ability of the industry to draw investment dollars from outside the industry.

However, some of the largest operators in Alaska are quite strong financially, and others have funding sources not tied to the oil price. Furthermore, in Cook Inlet, activity is more sensitive to the price of natural gas than oil, and the state, through its tax credit programs, has also provided a funding source not directly tied to the price of oil. Finally, the industry is under political pressure to show that the new state production tax, SB21, has stimulated new investment. Consequently, strategic considerations might help keep the flow of investment spending higher than price alone would suggest.

The long-term development prospects for oil and gas in Alaska remain strong, but cash for investment will be tight this year.

The following description of activity is based on the announced plans of the companies, but further cutbacks are possible as the year progresses.

On the North Slope, three big projects that generated several hundred million in annual construction spending ended last year. Shell abandoned its search for oil in the Chukchi Sea, Exxon completed development of the technically challenging Point Thomson field east of Prudhoe Bay, and ConocoPhillips finished development of the CD-5 satellite, west of the Colville River and the Alpine field.

The major leaseholders—ConocoPhillips, BP, and Exxon—continue to invest in new developments at Prudhoe Bay and Kuparuk to slow the rate of decline in those fields. Although they have announced spending cuts in their Alaska operations, the cuts have been less severe than in other locations in other parts of the world.

ConocoPhillips is still developing a new production site in the Kuparuk field and adding two new rigs to slow the rate of decline of that field. Its other major efforts are the West Sak viscous oil project (NEWS) and Greater Mooses Tooth (GMT-1) in NPRA (National Petroleum Reserve-Alaska), west of the Colville River.

BP will concentrate on expansion in the Prudhoe Bay field after selling its full interests in Endicott and Northstar and

Alaska Business Monthly | March 2016 www.akbizmag.com

half interests in Liberty and Milne Point to Hilcorp. It will be expanding drilling pads with two new drilling rigs.

The budgets of the other companies active on the North Slope are smaller this year than last.

The Spanish company Repsol has deferred its winter exploration drilling program in the Colville River area.

The Italian firm ENI (Ente Nazionale Idrocarburi) announced that it is postponing its two-year program of well drilling to bring the Nikaitchuq field into full production.

Caelus will be exploring at Smith Bay and working on both the Oooguruk and Nuka fields. It has two more years of drilling for total build out of Oooguruk and is considering expansion of the offshore island from which the field is accessed. It has postponed work on the Nuka field.

Brooks Range Petroleum is moving forward to develop the Mustang field, west of Kuparuk, with financial assistance from AIDEA (Alaska Industrial Development and Export Authority).

Hilcorp will concentrate activity at Northstar, Milne Point, and Endicott. In addition, it is working on a plan for development of the Liberty prospect.

The North Slope Borough will be drilling an exploration well in the Placer Unit.

A newcomer, AEA88, drilled an exploration well at the end of last year but has announced no plans for 2016.

Great Bear and Linc Energy are spending this year evaluating prospects.

A number of other companies, including Chevron, Anadarko, and Nordaq, have interests in various fields on the North Slope but are not operators. Their expenditures are also included in the total.

Spending in Cook Inlet will again be dominated by Hilcorp, which recently purchased the assets of both Chevron and Unocal. It continues to increase production from new production wells, repairs, workovers, and replacing facilities.

Blue Crest Energy, which purchased the assets of Buccaneer, continues to work on development of the Cosmopolitan field from an existing onshore pad.

Furie is developing the Kitchen Lights offshore field using a new monopod platform.

It has postponed two new wells because of uncertainty over the local gas market.

Aurora is planning an exploration program in the Susitna Flats.

Other lease owners and operators in Cook Inlet, like the Municipality of Anchorage and ConocoPhillips, will continue to spend on investments to optimize production.

Elsewhere in the state, Doyon will continue to explore for gas at its site near Newww.akbizmag.com

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nana, and Ahtna will be looking for gas for the local market at a site near Glennallen.

A new asphalt plant will be built at the refinery at North Pole.  Mining: $180 Million Spending by the mining industry on exploration and development,5 as well as maintaining and upgrading existing mines, will be about the same as last year, in spite of continued weakness in metal prices.

Spending by the six major mines currently in operation will be higher than last year, as producers make new investments to increase efficiency and to develop new prospects for future production to extend the life of the mines. Examples include a dry stack tailing storage facility at Greens Creek and extensive exploratory drilling at Pogo and Kensington.

Spending for drilling and other site work will be low again this year at the three world-scale mine projects currently in various stages of development (Donlin Creek, Pebble, and Livengood).

Numerous smaller projects across the state, such as the Bokan rare earth metals prospect in the Southeast, and the NovaGold upper Kobuk mineral projects, will also see limited activity.  Other Basic Industries: $104 Million Other basic industries—tourism, seafood, air cargo, and timber—benefit from lower oil prices, and construction spending in this sector of the economy will be higher than last year.

Plans for several new hotels in Anchorage, as well as hotels in Fairbanks, Sitka, and Denali, have been announced for this year. The number that are actually built will depend both on the strength of the tourism industry and the overall economy.

Although 2015 was a difficult year for seafood markets, a number of small seafood-related capital projects have been announced for this year.

Alaska Airlines has announced a multiyear $50 million program of investments to upgrade facilities in Alaska. This year the program includes a new hangar in Anchorage and upgrades to terminal facilities at a number of other locations around the state.  Utilities: $459 Million6 Utility spending will be down sharply this year because several large electricity generation expansion and renovation programs

have now been completed.

Among the Railbelt electric utilities, the large new MEA (Matanuska Electric Association) plant at Eklutna is finished, and the ML&P (Anchorage Municipal Light and Power) replacement plant in northeast Anchorage is also complete. HEA (Homer Electric Association) has finished both of its new power plants. CEA (Chugach Electric Association) will only be doing substation, distribution, and refurbishment work.

GVEA (Golden Valley Electric Association) is finishing work on its Healy 2 unit.

Some of the smaller utilities, such as Copper Valley and Kodiak, are also finishing large projects. Other smaller electric utilities are mostly doing routine maintenance. However, there are forty-nine small projects currently underway across the state, with funding assistance through the Renewable Energy programs of the state.

No significant expenditure related to gas utilities is projected as development of the gas distribution system for Fairbanks is currently on hold.

Telecommunications spending will be about the same as last year, as firms make expenditures to improve the quality of service. Telecommunications spending in Alaska benefits from funds generated by the Universal Service Funds, which channel revenues collected from services provided in other locations to help pay for needs in Alaska.  Hospitals & Healthcare: $195 Million Hospital and healthcare spending will be lower this year as a result of the completion of a number of large projects that expanded capacity in a number of markets, including Anchorage, Kenai, and Ketchikan. However, most public and private hospitals continue to expand and renovate in response to growing demands. The largest project this year will be in Fairbanks.

Alaska Native healthcare spending will be somewhat lower this year, as the pace of expansion in Anchorage decelerates. However, smaller projects are underway throughout the state, including in the southeast and the northwest. The Alaska Native Tribal Health Consortium is completing its two hundredroom hotel on the campus of the Alaska Native Medical Center.

The Yukon Kuskokwim Health Corporation has received a letter of commitment for a loan from the USDA, which will be the cornerstone for funding a large ($287

million) new hospital and outpatient clinic in Bethel. Work will start on the clinic this year.  Other Commercial: $150 Million Commercial construction spending consists primarily of office buildings, banks, retail space, and warehousing.7 The level of spending from year to year can be influenced by a few projects, like large office buildings or shopping malls, as well as the current and projected health of the economy.

Market indicators like vacancy rates and turnover are relatively healthy, but the outlook is fragile.

We expect the pace of commercial construction will slow this year, both because of weakness in the economy (slow growth over the last three years and forecasted decline in 2016 and possibly beyond) and uncertainty about the ability of the state government to successfully deal with the deficit. Specific larger projects now under construction or in the planning stage for this year include an expansion of the Anchorage Museum, a new retail development in East Anchorage (tenants include Krispy Kreme Doughnuts), and a new Fred Meyer store in Palmer.  Residential: $329 Million Although indicators for the residential market are relatively healthy as the new year begins, the economic slowdown and out-migration of population will begin to have a dampening effect as the year progresses. The strongest market is likely to continue to be the Mat-Su, since it is the only area continuing to see population growth. Projects with public funding will be less sensitive to these economic trends.

The changing composition of the population is having an impact on the demand for housing as well. Growth of both the senior and millennial populations is increasing the demand for smaller housing units.

PUBLICLY FINANCED CONSTRUCTION  National Defense: $552 Million Defense spending, which had been trending downward for several years, will be higher in 2016. The Corps of Engineers budget for MILCON (military spending for facilities on bases) will be higher because of an influx of sustainment, restoration, and modernization (SRM) work at Eielson Air Force Base and the beginning phase of the

5 Excluding exploration and development costs associated with environmental studies, community outreach, and engineering.

6 Although we include utilities and hospitals/healthcare spending in private spending, there is also a significant amount of public spending for some projects in these categories.

7 Our commercial construction figure is not comparable to the published value of commercial building permits reported by Anchorage and other communities.

Municipal reports of the value of construction permits may include government-funded construction, which we capture elsewhere in this report. We have also excluded hospitals, utilities, and this year hotels, from commercial construction, so we can provide more detail about those types of spending.

44

Alaska Business Monthly | March 2016 www.akbizmag.com

F-35 bed-down. Large projects will include an F-35 flight simulator building and work on the central heat and power plant, both at Eielson.

The first phase of a $1 billion expansion at Fort Greely and Clear Air Force Base for missile defense will also be underway this year. This program will add fourteen interceptor missiles to the defense system at Fort Greely over the next several years.

Spending on the civilian and other interagency programs of the Corps of Engineers will also be substantially higher than in past years. This spending typically funds Corps of Engineer projects for other federal agencies like NOAA, FAA, the BLM, as well as projects done in cooperation with Alaska communities, such as harbor improvements.

The environmental program budget of the Corps of Engineers, including FUDS (Formerly Used Defense Sites), will be lower than in past years. This program includes cleanup of hazardous substances and contaminants at former defense sites, as well as on current Army and Air Force installations.  Transportation—Highways & Roads: $705 Million Spending on highways and roads has tended to be stable and predictable, and 2016 is no exception, with spending expected to be the same as last year. The good news is that Congress finally passed a new federal transportation bill after many years of continuing appropriations. The new bill ensures that funding for Alaska roads (as well as the Marine Highway System and the Alaska Railroad) will continue to increase for at least the next five years. Some federal funds also go directly to Alaska Native tribal organizations for transportation projects.

Although spending on highways comes primarily from federal transportation funding, the state also funds highway and road construction with an annual capital appropriation to the Department of Transportation and Public Facilities, and through bonding. In addition the Department of Commerce, Community, and Economic Development disburses grants to local governments for road construction.

The most recent state transportation bond package was approved in 2013, and grants for local road construction were also large at that time because of the high price of oil. Since it takes considerable time for transportation appropriations to become “cash on the street” these funds are still contributing to current spending.

These funds will pay for major projects throughout the state, such as the Glenn Highway and Muldoon Road Interchange www.akbizmag.com

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project in Anchorage and reconstruction work on both the Dalton Highway and the Parks Highway in Wasilla. Several bridge projects are also on the schedule, including the Slana River and Tulsona Creek replacements. (Construction of the major reconfiguration of the Sterling Highway at Cooper Landing would begin in 2018.)

Local governments also spend on road construction and maintenance. Anchorage has a small bond issue for road construction each year, and other communities also bond for road improvements on a regular basis.

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 Transportation—Airports, Ports, & Harbors: $387 Million Federal funds, mainly from the Federal Aviation Administration’s AIP (Airport Improvement Program), provide the bulk of funding for airport improvements both at the large international airports in Anchorage and Fairbanks and the many smaller state-owned airports across the state. This continues to be a stable source of funding that is augmented by revenue bonds and other local sources. Most projects are scattered around rural Alaska.

Spending related to ports and harbors will be lower this year. Work on the redevelopment of the Port of Anchorage will be slow, and there will be no money to continue development of the Point McKenzie rail extension.

Spending from a combination of federal funding, state general funds, the transportation bond package, tourist-related fees, and local sources will be combined to underwrite projects throughout the state, including significant activity at Skagway, Valdez, Juneau, and Seward.  Alaska Railroad: $26 Million The core capital construction program for modernizing and upgrading the Alaska Railroad will continue at about the same level as last year. This is funded through a combination of federal grants, cash flow, and revenue bonds. The railroad is waiting for funding to move forward on the PTC (Positive Train Control) system, mandated by the federal government.  Denali Commission: $10 Million The Denali Commission—an innovative federal-state partnership Congress created in 1998 to more efficiently direct federal capital spending to rural infrastructure needs—received a breath of new life as a result of the recent visit by President Obama.

Spending will be stable.  Education: $406 Million Spending for education comes mostly from

Alaska Business Monthly | March 2016 www.akbizmag.com

state government, and it will be lower this year.

Direct state funding of rural schools will be less this year, with the completion of new schools as part of the settlement of the Kasayulie case. The schools at Nightmute and Napaskiak have been completed, and work continues on the school at Kwethluk.

Work on the only other school to be built as a result of that settlement, Kivalina, will not start this year. Other state funding will be for renovations and repairs.

The Legislature last year imposed a five-year moratorium on the decades-old practice of reimbursing municipalities for a share of the debt they incurred to build new and repair existing schools. This moratorium will more than double the price of new schools for urban school districts. This year the local school districts are still using funds from debt incurred before the moratorium to complete a number of projects.

In Anchorage the biggest projects will be completion of the upgrades to the Airports Heights and Mountain View Elementary schools. In Fairbanks construction of the Ryan Middle School will be the big project.

In the Mat-Su two schools are under construction—Dena’ina Elementary School and the replacement of the Iditarod Elementary School.

There will also be a new charter school in the Mat-Su, funded by a USDA loan. The school that recently burned down in Bethel may be replaced using funds from the insurance policy.

There will be little University of Alaska construction spending on buildings on either main campus this year. Work to complete the new engineering building in Fairbanks has been deferred due to lack of funds. Replacement of the power/heating plant in Fairbanks will be the biggest project. Only small projects will be undertaken at the other campuses.  Other Federal: $253 Million Although the largest categories of federal construction spending in Alaska are transportation grants (highways and airports) and national defense, there are several other sources of federal spending that contribute to construction spending. The largest of these are a series of grants that support housing and safe water programs in the state. Because these grants have been stable over the years, other federal spending has tended to be constant from year to year, as is the case in 2016.

Most of the funding for the state-administered Village Safe Water program for rural sanitation comes from federal sources, including the Environmental Protection Agency and the Indian Health Service. www.akbizmag.com

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With the state contribution, it is expected to be constant this year. Other types of federal grants to the state fund armories and veterans’ facilities and ferry terminals, among other things.

The federal government also provides construction grants to Alaska tribes, nonprofit organizations, and local governments across the state.8 Alaska Native nonprofit corporations, housing authorities, and healthcare providers receive most of this money. The largest of these programs in Alaska is NAHASDA (Native American Housing Assistance and Self-Determination Act) which provides assistance for housing construction in Alaska Native communities through grants to federally recognized tribes and Alaska Native housing authorities statewide.

Direct procurement by federal agencies like the Department of the Interior (National Park Service, US Fish and Wildlife Service, and Bureau of Land Management), the Postal Service, the Department of Agriculture, and NOAA (National Oceanic and Atmospheric Administration) also provides funding for construction each year.  Other State & Local: $422 Million State and local government capital spending—excluding transportation (roads, airports, and ports), education, health, and energy—will be lower this year. Many projects have been funded in recent years through the grants from the Department of Commerce, Community, and Economic Development to local governments and nonprofits throughout the state. These funds are starting to dry up.

The state budget also includes the ongoing state weatherization and home energy rebate programs, which have now been expanded to include commercial buildings.

The budget also funds a modest amount of deferred maintenance spread across all state departments.

Local government capital spending, from general funds and bonds as well as enterprise funds, direct federal grants, and foundations tends to be stable from year to year. A large share of this spending is for water and sewer facilities, but it also includes other construction, such as buildings, libraries, museums, recreational facilities, and solid waste facilities.

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8 Federal spending on healthcare projects for the Alaska Native community funneled to Alaska Native organizations is included in the Hospital/Healthcare section of this report.

Alaska Business Monthly | March 2016 www.akbizmag.com

Construction spending is one of the important contributors to overall economic activity in Alaska. Annual wage and salary employment in the construction industry in 2015 was about eighteen thousand workers, with average annual pay of $75,000, second only to mining (including petroleum). ment (mainly petroleum and mining), federal spending (military and grants to state and local governments and non-profit organizations), and state capital spending (which ultimately depends on petroleum revenues), through the general fund and bond sales.

These large external sources of construction funds also give a general boost to the economy, thus adding to the aggregate demand for new residential, commercial, and private infrastructure spending.

Construction In The Overall Economy Construction spending is one of the important contributors to overall economic activity in Alaska. Annual wage and salary employment in the construction industry in 2015 was about eighteen thousand workers, with average annual pay of $75,000, second only to mining (including petroleum). But that figure doesn’t include the “hidden” construction workers employed in other industries like oil and gas, mining, utilities, and government (force account workers). In addition, it does not account for the large number of self-employed construction workers—estimated to be about nine thousand in 2011.

Construction spending generates activity in a number of industries that supply inputs to the construction process. These “backward linkages” include, for example, sand and gravel purchases (mining), equipment purchase and leasing (wholesale trade), design and administration (business services), and construction finance and management (finance).

The payrolls and profits from this construction activity support businesses in every community in the state. As this income is spent and circulates through local economies, it generates jobs in businesses as diverse as restaurants, dentist’s offices, and furniture stores.

R www.akbizmag.com

ENERGY INFRASTRUCTURE CONSTRUCTION SERVICES 301 W. Northern Lights Blvd. • Suite 300 • Anchorage, Alaska • 99503 907.278.4400 • www.pricegregory.com

“BIA’s knowledge of heavy construction logistics & risk management in southeast Alaska has been the best partner our business could ask for. BIA is an Alaskan company who understands the complexities of Alaska construction.” ~ Jacqueline DuRette, Owner DuRette Construction Co. Inc.

INDEPENDENT COMMERCIAL INSURANCE & SURETY BROKERAGE. www.businessinsuranceassociates.com • 274-4142 • 9138 Arlon Street Ste A-1, Anchorage, AK 99507

March 2016 | Alaska Business Monthly

49

special section

Building Alaska

Photo courtesy of Alaska DOT&PF

Alaska Airport Projects ‘Transitioning into a maintenance standpoint’

By Julie Stricker

A

laska is in a class by itself when it comes to aviation.

More than 82 percent of the communities in the vast state aren’t connected to the road system, so airplanes are a vital link. According to the Alaska Department of Transportation and Public Facilities (ADOT&PF), there are more than four hundred public airports in Alaska and hundreds of other private strips and floatplane bases. The Alaska Aviation System is the largest in North America.

50

Alaska residents, on average, fly more than eight times as often as people in other states.

Aviation Industry

The ADOT&PF is involved in the day-today operations and maintenance of the facilities, in addition to leases, permits, and fee management at rural airports. The department is divided into three regions: Southcoast, which is Southeast Alaska and the Aleutians; Central, which includes

Anchorage; and Northern, which encompasses most of the rest of the state. Funding comes from both federal and state sources.

The aviation industry is also an economic lifeline for the state. It generates $3.5 billion and more than forty-seven thousand Alaska jobs annually, about 10 percent of jobs in the state. But what really sets the state apart is that one entity, the state of Alaska, is responsible for the upkeep of most of these facilities. In the Lower 48, a city or county may be responsible for one

Alaska Business Monthly | March 2016 www.akbizmag.com

or two facilities. ADOT&PF oversees 249, of which 247 are located in rural Alaska, many of them with gravel surfaces because of underlying permafrost.

Ted Stevens Anchorage International Airport is the fifth-largest airport in the world in terms of cargo throughput. It alone is responsible for one in ten jobs in Anchorage.

In addition, the state is home to the largest seaplane base in the world, Lake Hood, which is also owned and operated by the state of Alaska. The department is working on a draft master plan to update the seaplane base, with the first public meetings planned for the spring.

In addition, the US Army Corps of Engineers is studying the bluffs at Point Woronzof, just off the end of the Anchorage runways, which are in danger of erosion. In January, they proposed placing large rocks at the base of the bluff to combat erosion at a cost of $48 million.

Facilities Upkeep

The upkeep for Alaska’s aviation facilities costs millions of dollars every year, not including upgrades to stay compliant with Federal Aviation Administration (FAA) guidelines. After a slate of big construction projects to meet updated FAA mandates in

recent years, John Binder, deputy commissioner of ADOT&PF in charge of aviation, says the state has pretty much caught up with the requirements.

“The big items are mostly done,” he says.

“We’ve gotten to most of our runway relocations and we’re really transitioning into a maintenance standpoint.”

In 2015, Nome underwent a major $27 million construction program that realigned runways, cleared the surrounding areas, expanded the aprons, upgraded equipment, improved safety, and even excavated nearby hills to meet FAA lineof-site requirements. While the work was done to meet FAA requirements, Nome is positioned as a potential transportation hub for northwest Alaska as traffic increases through the Northwest Passage.

Nome is one of twenty-two airports in the state certificated by the FAA, Binder says, which allows larger planes with larger passenger loads to land. In Alaska, these are the airports serviced by Alaska Airlines.

“The project in Nome was kind of one of the last ones that Congress mandated,” Binder says, explaining that a plane crash in North Carolina a few years ago sparked the requirements.

“The things we have now are primarily rehabs,” Binder says. Among the larger

projects are the construction of snow removal equipment buildings in Bethel and Barrow.

Binder listed some of the upcoming projects for 2016, noting that the list is still a draft.  Galena will be getting new lights and its pavement rehabbed. Binder notes that only about fifty airports in the state are paved.  Runways in Aniak and Dillingham will need to be shifted, projects that will cost $40 million to $50 million. The projects will be done in shifts to accommodate the difficulty of getting materials and equipment in during the short construction season.  Cold Bay will get a new apron and taxiway rehab.  Hooper Bay is getting a runway rehab and a new building to house snow removal equipment.  Talkeetna is up for some “pretty significant” maintenance work.  Haines has a big drainage project in the works, with rehab work slated for its taxiways.

Last Big Project

“Probably the last big, major one is Kwigillingok, which is getting a whole airport re-

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51

A federally mandated $27 million project at the Nome Airport last summer realigned runways, cleared the surrounding areas, expanded the aprons, upgraded equipment, improved safety, and excavated nearby hills to meet FAA line-ofsite requirements.

Aerial imagery courtesy of Alaska DOT&PF

NOTE: Imagery acquired July 30, 2015.

0

52

250

500

1,000 Feet

Alaska Business Monthly | March 2016 www.akbizmag.com

.

www.akbizmag.com

March 2016 | Alaska Business Monthly

53

construction,” he says. “The subsurface has failed beneath the gravel runway, and the town is kind of bumped up against it.” The project will relocate the facility farther from town and will include a new gravel runway.

From a maintenance standpoint, gravel runways are preferred in rural Alaska, Binder says.

“There’s just no good ground out there to draw on material you need for subsurface,” he says, noting most of the communities are

54

on swampy ground underlain by permafrost.

Construction costs in rural Alaska are staggering, he says. Contractors are limited on what kind of material is available and how far it is from the construction site.

Gravel in rural Alaska can cost up to $400 per cubic yard delivered, compared with $22 per cubic yard in other states. Insulation placed under the gravel to keep the permafrost melting can add $1 million to the cost of a project, ADOT&PF says.

“Most places you can go a mile down the road and get your material,” Binder says, but not in many rural areas of the state, especially southwest Alaska.

In addition, mobilizing and demobilizing the equipment can take a year. Some projects have to be done in phases to allow material to settle and stabilize. “That’s time the contractor can’t use that equipment elsewhere,” he says.

“We have new construction projects, and then the maintenance is ongoing as well,”

Alaska Business Monthly | March 2016 www.akbizmag.com

he says. “We’re trying to transition to be able to maintain what we’ve got.”

Other than the projects mentioned above, Binder says the rest of the budget is going toward new equipment.

“That sucks up quite a big chunk of our federal funding,” he says. “Those are the big dollar items that catch people’s attention.”

Although much of the construction funding is federal, the state pays for the rest, and the challenges of the budget crisis are being felt.

In the department’s quarterly “Plane Talk” newsletter, Binder says the department is focusing on efficiencies and cost reductions: “Revenue generation options at our rural airports are limited, and while many of these airports are unattended, with no lease lots or other revenue sources, ensuring they remain safe and meet the daily aviation needs of the community is costly.”

The department is looking at additional revenue sources, such as a landing fee at the Deadhorse Airport and an increase in aviation fuel taxes.

Military Aviation

In addition to the public facilities, Alaska also is home to a large military presence.

The Pacific Air Forces Regional Support

www.akbizmag.com

Center oversees nine airfields within Alaska, says Tommie Baker, chief of community relations for the Eleventh Air Force, Alaskan Command.

Aside from normal maintenance procedures, Baker says the military has a major construction planned for the Cape Lisburne site in northwest Alaska.

The $41.6 million project, awarded to contractor Orion Marine Construction, will repair the rock seawall protecting the runway from erosion from tidal and stormdriven waves. The seawall, which protects the facility’s only runway, was damaged by a storm in 2012 and further depleted by erosion. The storm damaged the runway, resulting in a multi-day closure.

“If this project is not completed, future erosion of the embankment and resultant damage to the runway will halt fixed-wing aircraft to/from the airfield,” according to a US Air Force statement. “This would require use of helicopters which are more vulnerable to flight conditions, potentially endangering personnel, and reducing cargo support.”

Rock from a nearby quarry will be used.

Baker says weather and the seasons play a large role in Air Force maintenance operations.

“Often, during the winter, it’s incredibly difficult to access a site due to high winds

or inclement weather,” he says. “During the summer, we have to squeeze a year’s worth of maintenance and building upgrades into a few short months.

“Our gravel runways also present some challenges,” he says. “During the winter when the ground is frozen, the runways work great, but in the spring, when the ground thaws, we routinely do more maintenance to level the airstrip and ensure it meets Air Force standards.”

Other agencies such as the US Fish and Wildlife Service and the National Weather Service also routinely use the facilities, which are vital for the Air Force’s homeland defense mission, Baker writes in an email.

“The Long Range Radar where the airfields are located provide a strategic air picture and coastal surveillance to detect unidentified aircraft heading toward North America, as well as maintaining accountability of friendly military and commercial aircraft in our airspace,” he says.

“These airfields allow us to complete the crucial mission of watching the skies over North America.”

R Julie Stricker is a journalist living near Fairbanks.

March 2016 | Alaska Business Monthly

55

ALASKA BUSINESS MONTHLY’S

2016 CONSTRUCTION DIRECTORY

GENERAL CONTRACTORS Company

Top Executive

360 General LLC 1231 W. Northern Lights Blvd., #804 Anchorage, AK 99503 Phone: 907-222-1521 Fax: 907-222-1351

Tyler Loken

ABC, Inc. 401 Driveway St. Fairbanks, AK 99701 Phone: 907-457-2221 Fax: 907-457-5045

Susan Ellison, Pres.

Alaska Concrete Casting 5761 Concrete Way Juneau, AK 99801 Phone: 907-780-4225 Fax: 907-780-4230

Dave Hanna, Mng. Member

Alaska Dreams, Inc. 2081 Van Horn Rd., #2 Fairbanks, AK 99701 Phone: 907-455-7712 Fax: 907-455-7713

Meini Huser, Pres.

Alaska Interstate Construction LLC 2525 C St., Suite 305 Anchorage, AK 99503 Phone: 907-562-2792 Fax: 907-562-4179

Dave Cruz, Pres.

Alaska Quality Builders PO Box 674 Willow, AK 99688 Phone: 907-495-6200 Fax: 907-495-6200

Karrol Johnson, Pres.

Alaska Signs & Barricades, Inc. 1200 E. 76th Ave., Suite 1203 Anchorage, AK 99518 Phone: 907-344-2835 Fax: 907-344-0159

Jack Barnes, Pres.

BC Excavating LLC 2251 Cinnabar Lp. Anchorage, AK 99507 Phone: 907-344-4492

Gordon Bartel, Pres.

Brice Environmental Services Corp.

PO Box 73520 Fairbanks, AK 99707 Phone: 907-456-1955 Fax: 907-452-1067

Craig Jones, Pres.

Builders Choice, Inc. 351 E. 104th Ave. Anchorage, AK 99515 Phone: 907-522-3214 Fax: 907-522-3216

Mark Larson, Pres.

C & R Pipe and Steel, Inc. 401 E. Van Horn Rd. Fairbanks, AK 99701 Phone: 907-456-8386

Dennis Wilfer, Pres.

CDF General Contractors, Inc. PO Box 211586 Anchorage, AK 99521 Phone: 907-337-7600 Fax: 907-272-2209

Gary Murphy, Pres.

GENERAL CONTRACTORS

COMPANY

56

TOP EXECUTIVE

FOUNDED/ESTAB. AK

info@360designbuildllc.com 360designbuildllc.com

info@akabc.com akabc.com

alaskaconcretecasting@gci.net

sales@alaskadreamsinc.com alaskadreamsinc.com

info@aicllc.com aicllc.com

akqual@mtaonline.net alaskaqualitybuilders.com

aksigbar@alaska.net aksignsandbarricades.com

admin@bcxllc.net bcxllc.net

craigj@briceenvironmental.com briceenvironmental.com

sandi@builderschoice.us.com builderschoice.us.com

lindsayj@crpipe.net crpipesteel.net

cdfinc@alaska.net cdfincak.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

2012 2012

4 4

General contractor.

1995 1995

21 21

General contractor specializing in energy efficient remodeling and product sales.

Seamless siding and gutters, windows, doors, all remodeling. Material Sales include: Commercial doors, windows, store front, metal siding, metal flashing, door hardware, window wells.

2004 2004

4 4

Precast concrete supplier, furnishing utility, traffic and retaining wall products as well as custom casting, building panels and foundation systems. Rebar fabrication and supply house stocking 20' and 40' bar in #2 through #10 bar. Detailing, bending and cage tying services.

1994 1994

25 25

Design, sales and construction of fabric covered structures and pre-engineered metal buildings.

1995 1995

160 155

Alaska Interstate Construction, LLC is an Alaska company providing heavy civil construction services to private industry, as well as local, state and federal government agencies in the oil and gas, mining and public works sectors throughout Alaska-from the Aleutian chain to the North Slope.

1994 1994

7 7

Residential and commercial construction, home building, additions, remodels, garages, shops, decks, docks, insurance losses, custom homes and don't forget landscaping. "We Build Dreams."

1983 1983

3-5 3-5

Construction site traffic control; Furnish and install permanent traffic signs.

1982 1982

45 45

Complete hauling and excavation services, environmental, water, sewer and storm utilities, site work, hydro excavation, CCTV Inspection, GPS Site Mapping and fabrication.

1991 1991

13 13

Brice Environmental is an 8(a) and DBE certified Native owned small business specializing in remediation of contaminated soils, remote site demolition, environmental construction and remediation. Project history throughout Alaska and the Lower 48 states and Hawaii.

1996 1996

300 220

Manufacturer of modular buildings, wood and steel floor and roof trusses, full service lumber yard.

1992 1992

50 50

For the largest inventory of quality new and used steel pipe (1/2"-60"), aluminum, structural steel, angle, channels, beams, rebar, and culvert products statewide, think of C & R Pipe and Steel! Call us for all your needs!

1983 1983

4 4

Tenant improvements, commercial, residential, renovation and repair of damaged buildings, new construction, commercial, elevator installation and general contracting.

Focused on Green building practices. Another service we offer is construction consulting.

March 2016 | www.akbizmag.com

Terry Bailey, Sr. VP/AK Reg. Mgr.

ChemTrack Alaska, Inc. 11711 S. Gambell St. Anchorage, AK 99515 Phone: 907-349-2511 Fax: 907-522-3150

Carrie Lindow, Pres.

CONAM Construction Co. 301 W. Northern Lights Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-278-6600 Fax: 907-278-4401

Dale Kissee, Pres.

Cornerstone General Contractors, Inc. 4040 B St., Suite 200 Anchorage, AK 99503 Phone: 907-561-1993 Fax: 907-561-7899

Joe Jolley, Pres.

Criterion General, Inc. 2820 Commercial Dr. Anchorage, AK 99501 Phone: 907-277-3200 Fax: 907-272-8544

Dave DeRoberts, Pres.

Cruz Companies 7000 E. Palmer Wasilla Hwy. Palmer , AK 99645 Phone: 907-746-3144 Fax: 907-746-5557

Dave Cruz, President

TOP EXECUTIVE

Davis Constructors & Engineers, Inc. 6591 A St., Suite 300 Anchorage, AK 99518 COMPANIES Phone: 907-562-2336 Fax: 907-561-3620

FOUNDED/ESTAB. AK

Terry.Bailey@ch2m.com ch2m.com/alaska

info@chemtrack.net chemtrack.net

conamco.com

jjolley@cornerstoneak.com cornerstoneak.com

cocod@criteriongeneral.com criteriongeneral.com

info@cruzconstruct.com cruzconstruct.com Josh Pepperd, President/CEO admin@davisconstructors.com davisconstructors.com

Delta Constructors LLC 3000 C St., Suite 202 Anchorage, AK 99503 Phone: 907-771-5800 Fax: 907-771-5911

Ed Gohr, CEO

Fluor Alaska, Inc. MARINE LLC 4300 B St., Suite 210 A CIRI COMPANY Anchorage, AK 99503 Phone: 907-865-2000 Fax: 907-865-2023

Wyche Ford, GM/Sr. Project Dir.

info@deltaconstructors.net deltaconstructors.net

fluor.alaska@fluor.com fluor.com

1946 1962

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

25,380 Premier Alaskan oil & gas contractor with planning, siting, engineering, procurement, 2,403 logistics, sealift/truckable modules fabrication, piping, construction, program & construction management, operations & maintenance, supporting oil, gas, transportation, environmental, water, mining & government.

GENERAL CONTRACTORS

Top Executive

CH2M 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-762-1600

1973 1973

6-25 Please check out our Statement of Qualifications at chemtrack.net/about_us.htm.

6-25

1984 1984

300 300

General construction contractor specializing in design and construction of oil and gas facilities and pipelines, mining facilities, water and sewer facilities, and other remote infrastructure projects.

1993 1993

40 40

General contracting utilizing collaborative project delivery methods for new commercial construction and the precision renovation of existing facilities for Alaska leading academic, civic, industrial, medial, non-profit, oil and gas, and private development organizations.

1992 1992

94 94

Commercial general contractor.

1981 1981

465 326

Experts in resource development and heavy civil construction.

1976 1976

126 126

Davis brings a Òfull serviceÓ approach to projects, tailoring services to meet the specific needs of each client from design inception to project completion. Davis brings nearly 30 years of experience in Design/Build project delivery, representing over 3.5 million square COMPANIES feet of construction.

2007 2007

550 100

We manage over $13B in oil and gas projects for our clients across North America Services include Electrical/Instrumentation Automation/Controls Mechanical/Piping Structural/Piling Insulation Turnaround Projects Tie-Ins Well Site Devp Program/Project/ Construction Mgnt & Execution Professional Staff.

1912 1954

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

LLC

Company

COMPANY

40,000 Fluor is one of the worldÕs largest publicly traded engineering, procurement, construction ENERGY SERVICES LLC MARINE L 80 (EPC), maintenance, and project management companies.

Fluor works with A CIRI COMPANY A CIRI COMPANY governments and Clients in diverse industries around the world to design, construct, and maintain complex and challenging capital projects

BUILDING ALASKA

FOR MORE THAN

CONTRUCTION, INC

35 years

CONTRUCTION

Experts in Resource Development and Heavy Civil Construction Option 1

Option 2

ALASKA INTERSTATE CONTRUCTION

Option 1

LLC

LLC A CIRI COMPANY

Original

A CIRI COMPANY

ALASKA INTERSTATE CONTRUCTION

•Roads and Pads

LLC A CIRI COMPANY

ALASKA INTERSTATE CONTRUCTION

•Excavation and Dredging •Airports and Runways •Pipelines LLC A CIRI COMPANY

AL ASKA AGGREGATE PRODUCTS

LLC

•Mine Reclamation A CIRI COMPANY

AL ASKA AGGREGATE PRODUCTS

LLC A CIRI COMPANY

AL ASKA AGGREGATE PRODUCTS

•Communications and Power Lines cruzconstruct.com • (907) 746-3144 • 7000 E. Palmer-Wasilla Hwy, Palmer, AK 99645 www.akbizmag.com | March 2016

57

GENERAL CONTRACTORS

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

Company

Top Executive

Golden Heart Construction PO Box 72728 Fairbanks, AK 99707-2728 Phone: 907-458-9193 Fax: 907-458-9173

Craig Robinson, Pres.

Granite Construction Company 11471 Lang St. Anchorage, AK 99515 Phone: 907-344-2593 Fax: 907-344-1562

Derek Betts, VP/Region Mgr.

Jay-Brant General Contractors 460 Grubstake Ave. Homer, AK 99603 Phone: 907-235-8400 Fax: 907-235-8731

Charles Jay, Mgr./Member

K & W Interiors 9300 Old Seward Hwy. Anchorage, AK 99515 Phone: 907-344-3080 Fax: 907-349-5373

Dale Kaercher, Pres.

K-C Corp.

2964 Commercial Dr. Anchorage, AK 99501 Phone: 907-258-2425 Fax: 907-278-8018

Byron D. Kohfield, Pres.

Kiewit Infrastructure West Co. 2000 W. Int'l Airport Rd., #C6 Anchorage, AK 99502 Phone: 907-222-9350 Fax: 907-222-9380

Pat Harrison, Exec. Area Mgr.

Knik Construction 6400 S. Airpark Pl. Anchorage, AK 99502-1809 Phone: 907-249-0208 Fax: 907-245-1744

Steve Jansen, Pres.

Little Susitna Construction Co. 821 N St., Suite 207 Anchorage, AK 99501 Phone: 907-274-7571 Fax: 907-277-3300

Dominic Lee, Owner

Loken Construction LLC 5400 Eielson Anchorage, AK 99518 Phone: 907-868-8880

Tyler Loken

COMPANY

FOUNDED/ESTAB. AK

craig@goldenheartconstruction.net goldenheartconstruction.net

alaska.projects@gcinc.com graniteconstruction.com

cjay@jaybrant.com jaybrant.com

knwinteriors@alaska.net k-winteriors.com

bkohfield@kccorporation.com

damian.skerbeck@kiewit.com kiewit.com/northwest

knikinformation@lynden.com lynden.com/knik

littlesu@ak.net littlesu.com

1982 1982

1922 1974

WORLDWIDE\AK EMPLOYEES

6 6

Services

SERVICES

Commercial and residential remodel and new construction.

4,200 Public and private heavy civil construction, design-build, construction aggregates, 60 recycled base, warm and hot mix asphalt, road construction, bridges, piling, mine infrastructure and reclamation and sitework.

1983 1983

40 40

Public works, military and commercial construction.

1985 1985

21 21

K&W Interiors is a family owned business, providing Alaskans with fine quality interior finishes for over 30 years. K&W was selected as one of the top 500 Remodelers in the nation for 2012, 2013, and 2014 by Qualified Remodeler magazine. From Design to Installation your Satisfaction is Guarantee.

1986 1986

24 24

General contracting commercial/industrial. Specializing in light gage metal framing, sheetrock, taping, painting and specialty coatings.

1884 1947

1974 1974

1980 1980

25,000 Heavy civil construction including transportation, marine, dams and resource 200 development.

90 90

Knik Construction is a general heavy construction company specializing in remote-site projects. Knik's experience includes heavy construction, road building, asphalt paving, foamed asphalt treated bases, airport construction and reconstruction, excavation, crushing and transportation.

5-20 A general, mechanical and electrical contractor. Architects, civil, mechanical and 5-20 electrical engineers, licensed in twelve states. Construction project management.

Importer, exporter and global project consultation.

2003 2003

25 25

Commercial and residential framing, light steel, and siding.

Loken Crane, Rigging, and Transport LLC Tyler Loken 5400 Eielson Anchorage, AK 99518 info@lokencrane.com Phone: 907-868-8880 lokencrane.com

2014 2014

4 4

Full service crane, rigging, and transport operations.

Marsh Creek LLC 2000 E. 88th Ave. Anchorage, AK 99507 Phone: 907-258-0050 Fax: 907-279-5710

Mick McKay, CEO

2004 2004

Mass Excavation, Inc. PO Box 241093 Anchorage, AK 99524 Phone: 907-771-9272 Fax: 907-770-7752

Josh Pepperd, Pres.

Mechanical Contractors Fairbanks PO Box 74796 Fairbanks, AK 99707 Phone: 907-456-8347 Fax: 907-451-6132

58

TOP EXECUTIVE

info@lokenconstructionak.com lokenconstructionak.com

gina.heath@marshcreekllc.com marshcreekllc.com

admin@massexcavation.com massexcavation.com mcafbks@gci.net mcfairbanks.com

NORCON, Inc. 949 E. 36th Ave., Suite 143 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-275-6300

Randy Barnes, VP Norcon, Inc.

North Country Builders of Alaska 3435 N. Daisy Petal Cir. Wasilla, AK 99654 Phone: 907-373-7060

Thomas Smith, Pres.

Northern Dame Construction PO Box 871131 Wasilla, AK 99687 Phone: 907-376-9607

Doris Coy, Owner

Olgoonik Construction Services 3201 C St., Suite 700 Anchorage, AK 99503 Phone: 907-375-4749

Steve MacRae, GM

Osborne Construction Co. PO Box 97010 Kirkland, WA 98083 Phone: 425-827-4221 Fax: 425-828-4314

George Osborne Jr., Pres.

Inquiries@NORCON.com norcon.com

tsmith@northcountrybuilders.com northcountrybuilders.com

doris@northerndame.com

olgoonik.com

occ@osborne.cc osborne.cc

~140 Energy systems, environmental, construction, telecommunications.

140

2004 2004

39 39

Mass Excavation, Inc. was born out of a need for a responsive civil contractor capable of meeting the diverse range of services from large project development to more intricate building site improvement details. Mass X provides residential, commercial and industrial site development, and more.

1956 1956

0 0

Association of Mechanical Contractors utilizing trade skilled employees in industrial, commercial and residential construction and services.

1974 1974

174 138

1998 1998

2 2

Commercial and residential general contractor for new, remodel and all phases of construction.

1992 1992

15 15

Traffic control services.

2014 2014

35 35

Full service contractor: general contracting, design/build, site preparation, demolition and waste management, engineering services, personnel camp logistics, remodel and renovation, regulatory compliance, logistics and deployment, North Slope heavy equipment fleet.

1987 1988

112 93

General contractor focusing on commercial, industrial or residential buildings, designbuild, civil, site development, utilities and engineering work.

NORCON is a full-service General Contractor with expertise in mechanical, electrical, instrumentation & process pipe installations for AK Oil & Gas. Our experienced craft labor executes projects including well tie-ins, critical shutdowns/turnarounds, scaffolding, and support facility construction.

March 2016 | www.akbizmag.com

Pacific Pile & Marine 700 S. Riverside Dr. Seattle, WA 98108 Phone: 907-276-3873 Fax: 907-278-0306

Wil Clark, Mng. Partner

Paug-Vik Development Corp.

PO Box 429 Naknek, AK 99633 Phone: 907-258-1345 Fax: 907-222-5423

Maurice Labrecque, GM

Pfeffer Development 425 G St., Suite 210 Anchorage, AK 99501 Phone: 907-646-4644 Fax: 907-646-4655

Mark Pfeffer, Pres.

Price Gregory International 301 W. Northern Lights Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-278-4400 Fax: 907-278-3255

Robert Stinson, Sr. VP

Pruhs Construction 2193 Viking Dr. Anchorage, AK 99501 Phone: 907-279-1020 Fax: 907-279-1028

Dana Pruhs, CEO

Quality Asphalt Paving 240 W. 68th Ave. Anchorage, AK 99518 Phone: 907-522-2211

Todd Porter, GM

1971 1971

R H Development LLC PO Box 32403 Juneau, AK 99803 Phone: 907-790-4146 Fax: 907-790-4147

Richard Harris, Mng. Member

1992 1992

6 6

Residential and light commercial construction Real Estate Development. All aspects of construction, Land Acquisition and Development.

Roger Hickel Contracting, Inc. 11001 Calaska Cir. Anchorage, AK 99515 Phone: 907-279-1400 Fax: 907-279-1405

Mike Shaw, Pres.

1995 1995

49 49

General contractor; commercial and road work.

Siemens Industry, Inc. 5333 Fairbanks St., Unit B Anchorage, AK 99518 Phone: 907-563-2242 Fax: 907-563-6139

Leverette Hoover, GM AK

TOP EXECUTIVE

FOUNDED/ESTAB. AK

info@pacificpile.com pacificpile.com

info@pdcnaknek.com pdcnaknek.com

info@pfefferdevelopment.com pfefferdevelopment.com

pricegregory.com

dana@pruhscorp.com pruhscorp.com

admin@rhdalaska.net rhdalaska.net

contact@rhcak.com rogerhickelcontracting.com

leverette.hoover@siemens.com siemens.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

2008 2009

100 30

1996 1996

9 8

General contracting and environmental services.

2002 2002

7 7

Commercial real estate developer delivering civic, corporate, healthcare, and residential projects. Specializing in private delivery, public-private projects, strategic structuring, site analysis and acquisition, public process, project finance, design-build construction and asset management.

1974 1974

1958 1958

1849 1982

Pacific Pile & Marine (PPM) is a heavy civil marine contractor specializing in driven and drilled pile; marine structures such as marinas and breakwaters; environmental dredging; rock anchors; shoring; demolition; and heavy lift. PPM is an industry leader in safety experienced in design-build.

1,500 Pipeline, power, heavy industrial construction, EPC and consulting services.

300 Infrastructure construction services provider.

150 140

Heavy civil contractor, roads, airports, site work, underground utilities, industrial.

Highway, road, and airport runway construction throughout the State of Alaska.

500 seasonal

343,000 Energy Services Company (ESCO)/Total Building Integrator: to include Building 100 Automation/Energy Management control systems, fire alarm, HVAC mechanical systems, security (card access, CCTV, intrusion, etc.), audio and video solutions and mass notification systems.

GENERAL CONTRACTORS

Top Executive

COMPANY

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

Company

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alaskausa.org/insurance | (800) 478-1251 www.akbizmag.com | March 2016

59

GENERAL CONTRACTORS

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

ELECTRICAL CONTRACTORS

Company

Top Executive

Spinell Homes, Inc. 1900 W. Northern Lights Blvd., Suite 200 Anchorage, AK 99517 Phone: 907-344-5678 Fax: 907-344-1976

Charles Spinelli, Pres.

STEELFAB 2132 Railroad Ave. Anchorage, AK 99501 Phone: 907-276-4303 Fax: 907-276-3448

Richard Faulkner, Pres.

STG Incorporated 11710 S. Gambell St. Anchorage, AK 99515 Phone: 907-644-4664 Fax: 907-644-4666

James St. George, Pres.

Turnagain Marine Construction 9330 Vanguard Dr., #100 Anchorage, AK 99507 Phone: 907-261-8960

Jason Davis, Pres.

Tutka LLC 2485 E. Zak Cir., Suite A Wasilla, AK 99654 Phone: 907-357-2238 Fax: 907-357-2215

Amie Sommer, Member

UNIT COMPANY 620 E. Whitney Rd. Anchorage, AK 99501 Phone: 907-349-6666 Fax: 907-522-3464

Michael J. Fall, Pres.

Watterson Construction Co. 6500 Interstate Cir. Anchorage, AK 99518 Phone: 907-563-7441 Fax: 907-563-7222

Bill Watterson, Pres.

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

spinell@spinellhomes.com spinellhomes.com

steelfabak.com

info@stgincorporated.com stgincorporated.com

jdavis@turnagain.build turnagain.build

info@unitcompany.com unitcompany.com

info@wattersonsconstruction.com wattersonconstruction.com

Company COMPANY

TOP EXECUTIVE

AK Power & Communications 5451 Laona Dr. Anchorage, AK 99518 Phone: 907-792-2400 Fax: 907-278-8769

Mark Mckinney, Ops Mgr.

General contractor-residential and light commercial construction.

1948 1948

49 49

STEELFAB-Steel Source for Alaska. Fully-integrated steel fabricator, service center, and coatings facility with the largest volume capacity in the state. Located in Ship Creek since 1948.

1991 1991

85 85

Rural infrastructure construction, renewable energy systems, tower construction, power generation and distribution facilities, pile foundations and bulk-fuel systems.

2014 2014

25 25

Turnagain Marine specializes in complex heavy marine construction projects that include large diameter socketing, rock anchors, offshore mooring & heavy lift requirements. Over the last decade, their management team has delivered over 50 design-build and hard bid projects from Ketchikan to Nome.

1977 1977

75 75

Commercial General Contractor involved in all types of building construction including deign-build, construction management and design-assist.

1981 1981

135 134

Kodiak High School; Nuka Building for Southcentral Foundation; Mech/Elec Bldg - Ft. Greely; AVTEC Additon - Seward; Rabbit Creek and Airport Heights School Renovations/Additions; Irving Repurposing - UAF. Specializing in Design/Build projects.

Chenega Energy LLC 6151 A St. Anchorage, AK 99518 Phone: 907-382-7772 Fax: 907-261-3254

Greg Porter, Pres.

Electric International LLC 5451 Laona Dr. Anchorage, AK 99518 Phone: 907-792-2427

Kevin Scheele, Ops Mgr.

HotWire LLC 5451 Laona Dr. Anchorage, AK 99518 Phone: 907-792-2400 Fax: 907-278-8769

Chris Dillon, Pres.

Little Susitna Construction Co. 821 N St., Suite 207 Anchorage, AK 99501 Phone: 907-274-7571 Fax: 907-277-3300

Dominic Lee, Owner

FOUNDED/ESTAB. AK

gporter@chenegaenergy.com chenegaenergy.com

hotwirellc.com/contact/hotwire-electric

info@hotwirellc.com hotwirellc.com

littlesu@ak.net littlesu.com

HEAVY EQUIPMENT DEALERS

Company COMPANY

Top Executive TOP EXECUTIVE

Airport Equipment Rentals 1285 Van Horn Rd. Fairbanks, AK 99707 Phone: 907-456-2000 Fax: 907-457-7609

Jerry Sadler, Owner/Pres.

Construction Machinery Industrial 5400 Homer Dr. Anchorage, AK 99518 Phone: 907-563-3822 Fax: 907-563-1381

Ken Gerondale, Pres./CEO

Craig Taylor Equipment 733 Whitney Rd. Anchorage, AK 99501 Phone: 907-276-5050

Chris Devine, Pres./CEO

Delta Leasing LLC 8101 Dimond Hook Dr. Anchorage, AK 99507 Phone: 907-771-1300 Fax: 907-771-1380

Rudi von Imhof, Pres.

o.prestwick@cmiak.com cmiak.com

anc.sales@craigtaylorequipment.com craigtaylorequipment.com

info@deltaleasing.com deltaleasing.com

SERVICES

15 15

An established electrical contractor on the North Slope and the Alaskan interior APC provides full service electrical contracting.

2012 2012

8 7

Founded in 2012, Chenega Energy LLC provides Combined Heat and Power energy solutions and Distributed Generation throughout Alaska and the Pacific Northwest.

1964 1964

90 90

Electric International is a recognized leader in electric construction in Alaska today. Our clients range from the home owner to the developer of a high rise. We work throughout the state of Alaska.

1960 1960

250 250

Full service electric and communications contracting, including outside electric, inside electric and communications solutions for industrial, commercial, and institutional markets. Pre-construction, general contracting, specialty sub-contracting, and maintenance services provided throughout Alaska.

1980 1980

5-20 A general, mechanical and electrical contractor. Architects, civil, mechanical and 5-20 electrical engineers, licensed in twelve states. Construction project management.

Importer, exporter and global project consultation.

FOUNDED/ESTAB. AK

aerinc4@alaska.net aer-inc.net

Services

WORLDWIDE\AK EMPLOYEES

2007 2007

HEAVY EQUIPMENT DEALERS

60

10-30 WBE/DBE, EDWOSB/WOSB, HUBZone, General Contractor, heavy civil construction, 10-30 environmental cleanup and consulting, SWPPPs, subdivision development.

AK Estab. Empls.

hotwirellc.com

SERVICES

25 25

ELECTRICAL CONTRACTORS Top Executive

Services

1987 1987

1999 1999

amie@tutkallc.com tutkallc.com

WORLDWIDE\AK EMPLOYEES

WORLDWIDE\AK EMPLOYEES

Services SERVICES

1986 1986

105 105

Industrial services.

1985 1985

112 112

Construction and mining equipment sales, rentals, service, and parts.

1954 1954

62 62

Factory authorized dealer for: Doosan large excavators, loaders & articulated trucks; Bobcat mini-loaders & excavators; Dynapac compaction rollers; Fecom land clearing attachments & carriers. Providing sales, rentals, parts, and service. Alaskan owned and operated, serving AK for more than 60 years.

2002 2002

43 43

Specialized leasing of fleet trucks, SUVs, vans, & shuttle buses, as well as construction & mining equipment, oil & gas equipment. GM, Dodge & International warranty repair center. Alaskan-owned. Deadline driven. Results oriented. Anchorage/Kenai/Prudhoe Bay/Fairbanks/Remote Alaska.

March 2016 | www.akbizmag.com

HEAVY EQUIPMENT

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

Company

Top Executive

Equipment Direct, Inc. PO Box 425 Willow, AK 99688 Phone: 907-696-7375 Fax: 907-696-7375

L. Butera

Equipment Source, Inc. 1919 Van Horn Rd. Fairbanks, AK 99701 Phone: 888-868-9049 Fax: 907-458-7180

Troy Lockes, GM

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1985 1985

3 1

Construction equipment sales, parts, rentals. Morooka all-terrain dump carriers.

2000 2000

49 35

We offer durable, Alaskan built industrial heaters, generator sets, triplex pumps, water pumps, trailers, enclosures, and more. Our manufactured products focus on supplying solutions for the oil, gas, and mining industries. We are also a proud Kubota Tractor dealer.

Loken Crane, Rigging, and Transport LLC Tyler Loken 5400 Eielson Anchorage, AK 99518 info@lokencrane.com Phone: 907-868-8880 lokencrane.com

2014 2014

4 4

Full service crane, rigging, and transport operations.

N C Machinery 6450 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-786-7500 Fax: 907-786-7580

John J. Harnish, Pres./CEO

1776 1926

Totem Equipment & Supply, Inc. 2536 Commercial Dr. Anchorage, AK 99501 Phone: 907-276-2858 Fax: 907-258-4623

Mike Huston, VP

TrailerCraft | Freightliner of Alaska 1301 E. 64th Ave. Anchorage, AK 99518-1908 Phone: 907-563-3238 Fax: 907-561-4995

Lee McKenzie, Pres./Owner

Washington Crane & Hoist 651 E. 100th Ave., Unit B Anchorage, AK 99515 Phone: 907-336-6661 Fax: 907-336-6667

Mike Currie, VP

West-Mark Fairbanks Service Center 3050 Van Horn Rd. Fairbanks, AK 99709 Phone: 907-451-8265 Fax: 907-451-8273

Grant Smith, CEO

Yukon Equipment, Inc. 2020 E. Third Ave. Anchorage, AK 99501 Phone: 800-478-1541 Fax: 907-258-0169

Charles Klever, Pres.

sales@eqdirect.com eqdirect.com

equipmentsourceinc.com

sfield@ncmachinery.com ncmachinery.com

sales@toteminc.com toteminc.com

sales@trailercraft.com trailercraft.com

SDick@washingtoncrane.com washingtoncrane.com

wwalker@west-mark.com west-mark.com

info@yukoneq.com yukoneq.com

1,192 Cat machine sales, parts, service, and rental. Cat engines for marine, power generation, 257 truck, petroleum, and industrial applications. Sales and rental of Cat and other preferred brands of rental equipment and construction supplies.

1961 1961

~20 ~20

Totem heaters, Frost Fighter heaters, Sure Flame heaters, Sany Excavators, Terex, Mustang, Rhino Sky Jack, Clemco, Wacker, MultiQuip, Honda, Alkota, Genie, Vector,Wyco, Weber,Wacker,Biljax,Blast-pro,Toro/Dingo, Munter heaters.

1969 1969

55 55

Parts, sales and service for trucks, tractors, trailers, transport equipment, snow plows and sanders.

1975 2008

35 10

Crane builders, crane design, new crane sales, new hoist sales, lifting equipment design and sales. Material handling solutions for industry, hoists, job cranes, work stations, chain falls, lever hoists, crane upgrades, crane maintenance, crane inspection, crane repair, hoist repair and crane parts.

1968 2009

250 12

Liquid transportation tank trailer repair.

1945 1945

43 43

Sales, service, parts, rental and lease equipment, including Case, Trail King, Elgin, Vactor, Oshkosh, Etnyre, Monroe, Trackless, and Snow Dragon. Anchorage, Fairbanks, and Wasilla locations. A subsidiary of Calista Corp.

Proudly providing highly skilled manpower to mechanical contractors and bringing projects in ahead of schedule and under budget, since 1938.

United Association Plumbers & Steamfitters Union Local 367

62

Learn more about UA Local 367 and the mechanical contractors we work with by visiting www.ualocal367.org and www.amcaanc.com March 2016 | www.akbizmag.com

Top Executive

Ace Supply, Inc. 2425 E. Fifth Ave. Anchorage, AK 99501 Phone: 907-277-4113 Fax: 907-277-4112

Erick Smith, Pres.

Advanced Flooring Solutions 6260 Old Seward Hwy. Anchorage, AK 99518 Phone: 907-770-7202 Fax: 907-770-7203

Rich Markgraf

AirSide Solutions, Inc. 2222 West Valley Hwy. N., Suite 140 Auburn, WA 98001 Phone: 253-833-6434 Fax: 253-833-6825

Rick Lafferty, VP/ Region Mgr.

Alaska Concrete Casting 5761 Concrete Way Juneau, AK 99801 Phone: 907-780-4225 Fax: 907-780-4230

Dave Hanna, Mng. Member

Alaska Dreams, Inc. 2081 Van Horn Rd., #2 Fairbanks, AK 99701 Phone: 907-455-7712 Fax: 907-455-7713

Meini Huser, Pres.

Alaska Industrial Hardware, Inc. 2192 Viking Dr. Anchorage, AK 99501 Phone: 907-276-7201 Fax: 907-258-3054

Terry Shurtleff, Pres./CEO

Alaska Pump & Supply, Inc. 261 E. 56th Ave., Bldg A Anchorage, AK 99518 Phone: 907-563-3424 Fax: 907-562-5449

Terry Gorlick, Pres. AK Rtng Equip.

Alaska Rubber & Rigging Supply 5811 Old Seward Hwy. Anchorage, AK 99518-1479 Phone: 907-562-2200 Fax: 907-561-7600

Janeece Higgins, CEO

www.akbizmag.com | March 2016

TOP EXECUTIVE

FOUNDED/ESTAB. AK

Erick@akpetro.com

rich@flooralaska.com flooralaska.com

rlafferty@wsminc.biz adb-air.com

alaskaconcretecasting@gci.net

sales@alaskadreamsinc.com alaskadreamsinc.com

info@aih.com aih.com

sales@alaskapump.com alaskapump.com

info@alaskarubber.com alaskarubber.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1962 1962

4 4

Petroleum handling equipment for Commercial, Industrial and Aviation Industries.

Pumps, Meters, Reels, Filters, Tank Monitors as well as Fuel Testing Equipment.

2007 2007

7 7

Residential and Commercial Flooring Design, Sales, and Installation.

1978 1988

10 0

AirSide Solutions is a full line provider of Airfield and Heliport Lighted Navigation systems, Technical Services, and logistics support to the aviation market in Alaska.

2004 2004

4 4

Precast concrete supplier, furnishing utility, traffic and retaining wall products as well as custom casting, building panels and foundation systems. Rebar fabrication and supply house stocking 20' and 40' bar in #2 through #10 bar. Detailing, bending and cage tying services.

1994 1994

25 25

Design, sales and construction of fabric covered structures and pre-engineered metal buildings.

1959 1959

200 200

Industrial/Constructions supplies; power tools; hand tools; safety; fasteners; maintenance and janitorial; material handling; outerwear.

1908 1978

1981 1981

3,500 Serving industrial, municipal and commercial customers, Alaska Pump (a DXP 27 Company) is at the leading edge of technology providing the best rotating equipment, bearing and PT, MROP, safety products, expert service and engineered solutions from skids to complete modules. Field services are available.

100 64

AK's largest supplier of hydraulic & industrial hose assemblies & associated products; specialize in fabrication/testing of wire rope, chain & synthetic slings for overhead lifting & rigging; supply & service fueling, lubrication & pressure washing equip, hydraulic pumps, motors, cylinders & valves.

COMMERCIAL & INDUSTRIAL SUPPLIERS

Company

COMPANY

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

COMMERCIAL & INDUSTRIAL SUPPLIERS

63

COMMERCIAL & INDUSTRIAL SUPPLIERS

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

Company

Top Executive

Alaska Signs & Barricades, Inc. 1200 E. 76th Ave., Suite 1203 Anchorage, AK 99518 Phone: 907-344-2835 Fax: 907-344-0159

Jack Barnes, Pres.

Altrol Heating, Cooling & Plumbing 2295 Van Horn Rd. Fairbanks, AK 99701 Phone: 907-452-8680 Fax: 907-452-6778

David Bridges, Pres./GM

Anchorage Sand & Gravel 1040 O'Malley Rd. Anchorage, AK 99515 Phone: 907-349-3333 Fax: 907-344-2844

Dale Morman, Pres.

Anchorage True Value Hardware 9001 Jewel Lake Rd., # 5 Anchorage, AK 99502 Phone: 907-248-9211 Fax: 907-248-6976

Tim Craig

Architectural Supply Co., Inc. 3699 Springer St. Anchorage, AK 99503 Phone: 907-561-1919 Fax: 907-562-5540

Jennifer Mattingly, AHC, Pres.

Arctic Controls, Inc. 1120 E. Fifth Ave. Anchorage, AK 99501 Phone: 907-277-7555 Fax: 907-277-9295

Scott Stewart, Pres.

ATCO Structures & Logistics Ltd. 425 G St. Anchorage, AK 99501 Phone: 907-677-6983 Fax: 907-677-6984

Steve Lockwood, Pres.

Aurora Construction Supply, Inc. PO Box 83569 Fairbanks, AK 99708 Phone: 907-452-4463 Fax: 907-456-3414

R L "Dick" Engebretson, Pres.

Bering Shai Rock & Gravel LLC PO Box 196 Unalaska, AK 99685 Phone: 907-581-1409 Fax: 907-581-3409

Diane Shaishnikoff, Owner/Mgr.

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

aksigbar@alaska.net aksignsandbarricades.com

dave@altrolinc.com altrolinc.com

anchsand@anchsand.com anchsand.com

anchoragehardware@truevalue.net truevalue.com

Jennifer@archialaska.com

customerservice@arcticcouriers.com arcticcontrols.com

aurorasupply@gci.net

Dianeshai@hotmail.com beringshairock.com

Services

SERVICES

3-5 3-5

Construction site traffic control; Furnish and install permanent traffic signs.

1982 1982

25 25

Heating, ventilation, air conditioning, plumbing, sheet metal, and refrigeration contractor and service company.

1938 1938

~100 Anchorage Sand & Gravel has been supplying building materials to Alaska since 1938. ~100 We specialize in building materials relating to concrete and aggregates, including landscaping products, rebar, block, and precast. Our showroom off of Klatt Road in south Anchorage is open to to the public.

1949 1949

25 25

Traditional retail hardware store with core departments: tools, hardware, plumbing, electrical, paint and seasonal products.

1977 1977

7 7

Supplier of Division 8 & 10-commercial doors, frames, hardware, toilet partitions, and toilet accessories.

1985 1985

4 4

Arctic Controls Inc. is Alaska's leading expert in valves, flow meters, actuators, instrumentation, and process controls for commercial oil, gas, and water management.

Providing professional expertise for all commercial applications and can assist you with estimates and recommendations.

1947 2009

atco@atcosl.com atcosl.com

WORLDWIDE\AK EMPLOYEES

1983 1983

2,500 ATCO Structures & Logistics offers complete infrastructure solutions to customers 2 worldwide, including remote work force housing, portable offices and trailers, innovative modular facilities, construction, site support services, operations support, catering and noise reduction technologies.

1978 1984

1 1

Specialty items in Division 10.

2004 2004

5 5

Native owned and operated business specializing in the production and placement of high-quality rock materials, as well as providing heavy equipment rentals and services for any type of small or large construction project, including airports, boat harbors and road building projects.

INTEGRATED SOLUTIONS WORLDWIDE EXPERIENCE COMBINED WITH UNRIVALED ARCTIC EXPERTISE • General Contracting and Construction Management • Government, Commercial, Residential • Industrial/Mechanical • Water and Fuel Systems • Remote Arctic Logistics

A MEMBER OF THE UKPEAĠVIK IÑUPIAT CORPORATION FAMILY OF COMPANIES

6700 Arctic Spur Road Anchorage, AK 99518 907.677.8220 www.uicdpb.com

64

March 2016 | www.akbizmag.com

Dennis Wilfer, Pres.

Cabinet Fever, Inc. 8220 Petersburg St., Suite 1 Anchorage, AK 99507 Phone: 907-349-4871 Fax: 907-349-4891

Kurt Echols, Pres.

Capitol Glass/Northerm Windows 2300 E. 63rd Ave Anchorage, AK 99507 Phone: 907-272-4433 Fax: 907-272-3747

Tony Pogano, GM

Carberry Associates PO Box 242563 Anchorage, AK 99524 Phone: 907-227-1598 Fax: 907-345-2497

Tom Carberry, Owner

Door Systems of Alaska, Inc. 18727 Old Glenn Hwy. Chugiak, AK 99567 Phone: 907-688-3367 Fax: 907-688-3378

Beth Bergh, Owner

Equipment Source, Inc. 1919 Van Horn Rd. Fairbanks, AK 99701 Phone: 888-868-9049 Fax: 907-458-7180

Troy Lockes, GM

Glass Sash & Door Supply 500 E. Ship Creek Ave. Anchorage, AK 99501 Phone: 907-276-1655 Fax: 907-276-6712

Tom Dooley AHC/CDC, VP

Greer Tank & Welding 3140 Lakeview Dr. Fairbanks, AK 99701 Phone: 907-452-1711 Fax: 907-456-5808

Mark Greer, GM

Hayden Electric Motors, Inc. 4191 Old Seward Hwy. Anchorage, AK 99503 Phone: 907-561-1073 Fax: 907-561-5867

Roger Saunders, VP/GM

www.akbizmag.com | March 2016

TOP EXECUTIVE

FOUNDED/ESTAB. AK

lindsayj@crpipe.net crpipesteel.net

kurt@cabinetfever.net cabinetfever.net

barrya@cgnw.com capitolglassak.com

carberryassociates@acsalaska.net

beth@doorsystemsak.com doorsystemsak.com

equipmentsourceinc.com

info@glasssashanddoor.com glasssashanddoor.com

info@greertank.com Greertank.com

ask@hayden-ak.com hayden-ak.Com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1992 1992

50 50

For the largest inventory of quality new and used steel pipe (1/2"-60"), aluminum, structural steel, angle, channels, beams, rebar, and culvert products statewide, think of C & R Pipe and Steel! Call us for all your needs!

1999 1999

6 6

Commercial & residential custom cabinet shop producing high-end custom kitchen cabinets, counter tops & installation as well as custom furniture, entertainment centers, reception desks, medical, dental & retail casework, store fixtures. Also carry two lines of manufactured residential cabinets.

1953 1953

55 48

Manufacturers of Vinyl windows, insulated glass units, hand railings and more. Made in Alaska products.

1994 1994

1 1

Manufacturer's Representative for specialty commercial building products.

2000 2000

15 15

Commercial and industrial doors, Cornell rolling doors, grilles, shutter. Fire-rated rolling door and accordion fire-rated side folding partitions. Modernfold Flat wall partitions, Accordion Partitions, Skyfold room separation. McGuire dock equipment. EPD/Renlita Hangar doors. Blast-resistant doors.

2000 2000

49 35

We offer durable, Alaskan built industrial heaters, generator sets, triplex pumps, water pumps, trailers, enclosures, and more. Our manufactured products focus on supplying solutions for the oil, gas, and mining industries. We are also a proud Kubota Tractor dealer.

1952 1952

4 4

Builders hardware, commercial wood and steel doors and frames, toilet partitions and accessories.

1952 1952

99 72

With over 60 yearsÕ experience in the tank manufacturing business, Greer has established its place in the market. Greer can not only meet your tank manufacturing needs, but we can also offer an array of products and services for all your contracting and fabrication needs.

1959 1959

12 11

Sales, service and rewinding of electric motors and generators and associated equipment. On-site service calls. Re-certification of explosion-proof motors.

COMMERCIAL & INDUSTRIAL SUPPLIERS

Top Executive

C & R Pipe and Steel, Inc. 401 E. Van Horn Rd. Fairbanks, AK 99701 Phone: 907-456-8386

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

Company

COMPANY

65

COMMERCIAL & INDUSTRIAL SUPPLIERS

ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

Company

66

COMPANY

Top Executive

TOP EXECUTIVE

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

Hi-Tec Professional Autobody Supply, Inc. Bert Hubbard, Pres.

2375 E. 63rd Ave. Anchorage, AK 99507 mike.mcgovney@gmail.com Phone: 907-562-6567 Fax: 907-563-9601 hitecautopaint.com

1989 1989

18 18

Supply automotive, aircraft and industrial paint and all the related supplies.

Independent Lift Truck of Alaska 1200 E. 70th Ave. Anchorage, AK 99518 Phone: 907-344-3383 Fax: 907-344-8366

Wayne Dick, Pres.

1982 1982

22 22

Authorized Dealers and repair centers for Advance floor care machines. CAT, Jungheinrich, Mitsubishi, Manitou, Maximal, Bendi and DREXEL forklifts; GEHL and Wacker Neuson construction equipment. Full parts, sales and service for most all makes and models of equipment.

Lifewater Engineering Company 1936 Donald Ave. Fairbanks, AK 99701 Phone: 907-458-7024 Fax: 907-458-7025

Bob Tsigonis, Pres.,PE

1998 1998

8 8

Manufacturing sewage treatment plants for man camps, homes, and lodges in the most extreme environments and remote places. Manufacturing high performance plastic jet boats and rugged work boats. Custom plastic fabrication.

Motion Industries, Inc. 1895 Van Horn Rd., Unit A Fairbanks, AK 99701 Phone: 907-452-4488 Fax: 907-456-8840

Nick Morgan, Fairbanks Branch Mgr.

Motion Industries, Inc. 611 E. Int'l Airport Rd. Anchorage, AK 99518 Phone: 907-563-5565 Fax: 907-563-5536

Matt Bailey, Anch. Branch Mgr.

N C Machinery 6450 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-786-7500 Fax: 907-786-7580

John Harnish, Pres./CEO

Northland Wood Products 6841 Brayton Dr. Anchorage, AK 99507 Phone: 907-452-4000 Fax: 907-452-1391

James Enochs, Anch. Mgr.

Polar Supply Co. 300 E. 54th Ave. Anchorage, AK 99518-1230 Phone: 907-563-5000 Fax: 907-562-7001

Ed Waite, Sr. VP

Specialty Products, Inc. 1425 Spar Ave. Anchorage, AK 99501 Phone: 907-276-7932 Fax: 907-279-2749

Mike Brunke, AK Mgr.

barry.ilt@gci.net iltalaska.com

Bob@LifewaterEngineering.com LifewaterEngineering.com

MiMarketing@motionindustries.com motionindustries.com

MiMarketing@motionindustries.com motionindustries.com

sfield@ncmachinery.com ncmachinery.com

northlandwood@acsalaska.net northlandwood.com

dshooner@polarsupply.com polarsupply.com

mikeb@specialty-products.com specialty-products.com

1970 2010

4,000 A leading distributor of industrial maintenance, repair and operations (MRO) 11 replacement parts (over 5.9 million parts), including bearings, power transmission, hydraulic/pneumatic components, linear, hydraulic/indus. hose, indus. & safety supplies, process pumps, seals & material handling.

1970 2010

4,000 A leading distributor of industrial maintenance, repair and operation (MRO) replacement 11 parts (over 5.9 million parts), including bearings, power transmission, hydraulic/ pneumatic components, linear, hydraulic/industrial hose, industrial and safety supplies, seals, process pumps & material handling.

1776 1926

1,192 Cat machine sales, parts, service, and rental. Cat engines for marine, power generation, 257 truck, petroleum, and industrial applications. Sales and rental of Cat and other preferred brands of rental equipment and construction supplies.

1965 1965

1985 1985

1974 1974

30 30

Building supplier. Produce WWPA-graded surfaced lumber, rough lumber, large timber and house logs. Stocks materials to fulfill all building needs from the foundation piers to the roof screws.

10,000 Polar Supply is Alaska's leading supplier of industrial products and construction 700 materials. Putting customer service first, Polar has consistently delivered for clients large and small. A Division of Spenard Builders Supply with locations in Anchorage, Fairbanks and Kenai.

43 4

Manufacturer and distributor of polyurethane spray and pour foams, polyurea elastomer coatings, and application equipment. Solutions for: oil and gas, mining, wastewater, building insulation, marine, and many other industries. Year-round 24-7 tech support, classroom and offsite training.

March 2016 | www.akbizmag.com

Spenard Builders Supply, Inc. 300 E. 54th Ave., Suite 201 Anchorage, AK 99518 Phone: 907-261-9105 Fax: 907-261-9142

Ed Waite, Senior VP

STEELFAB 2132 Railroad Ave. Anchorage, AK 99501 Phone: 907-276-4303 Fax: 907-276-3448

Richard Faulkner, Pres.

Surveyors Exchange Co. 3630 Springer St. Anchorage, AK 99503 Phone: 907-561-6501 Fax: 907-561-6525

David Wilmarth, Owner

Swagelok Alaska 341 E. 56th Ave. Anchorage, AK 99518 Phone: 907-563-5630 Fax: 907-563-4721

Brenton Burbank, Dir. AK Ops

Totem Equipment & Supply, Inc. 2536 Commercial Dr. Anchorage, AK 99501 Phone: 907-276-2858 Fax: 907-258-4623

Mike Huston, VP

Truckwell of Alaska, Inc. 5801 Silverado Way Anchorage, AK 99519-1659 Phone: 907-349-8845 Fax: 907-344-0644

Kris Swanson, Owner

Vertex Insulation PO Box 72244 Fairbanks, AK 99707 Phone: 907-456-7361 Fax: 907-451-0362

TOP EXECUTIVE

FOUNDED/ESTAB. AK

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1952 1952

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

10,000 Provides a full line of building materials and home-improvement products to fill the needs 700 of residential and commercial contractors.

1948 1948

49 49

STEELFAB-Steel Source for Alaska. Fully-integrated steel fabricator, service center, and coatings facility with the largest volume capacity in the state. Located in Ship Creek since 1948.

1969 1969

15 15

Satellite phone and two-way radio specialists, auto-desk software, surveying instruments, sales, rentals and service.

1965 1965

10 10

Instrumentation and fluid system components. Authorized Swagelok distributor for Alaska.

1961 1961

~20 ~20

Totem heaters, Frost Fighter heaters, Sure Flame heaters, Sany Excavators, Terex, Mustang, Rhino Sky Jack, Clemco, Wacker, MultiQuip, Honda, Alkota, Genie, Vector,Wyco, Weber,Wacker,Biljax,Blast-pro,Toro/Dingo, Munter heaters.

1989 1989

20 20

Truck equipment and custom fabrication specializing in harsh environments and oil field support.

Rick Rocheleau, Pres.

1954 1954

10 10

Polyurethane foam and specialty coatings.

Washington Crane & Hoist 651 E. 100th Ave., Unit B Anchorage, AK 99515 Phone: 907-336-6661 Fax: 907-336-6667

Mike Currie, VP

1975 2008

35 10

Crane builders, crane design, new crane sales, new hoist sales, lifting equipment design and sales. Material handling solutions for industry, hoists, job cranes, work stations, chain falls, lever hoists, crane upgrades, crane maintenance, crane inspection, crane repair, hoist repair and crane parts.

West-Mark Fairbanks Service Center 3050 Van Horn Rd. Fairbanks, AK 99709 Phone: 907-451-8265 Fax: 907-451-8273

Grant Smith, CEO

1968 2009

250 12

Liquid transportation tank trailer repair.

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info@alaska.swagelok.com swagelok.com/Alaska

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SDick@washingtoncrane.com washingtoncrane.com

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ALASKA BUSINESS MONTHLY | 2016 CONSTRUCTION DIRECTORY

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COMPANY

67

INSURANCE

Commercial and Contract Surety Bonds An important asset to all parties involved

By Tracy Barbour

S

urety bonds are increasingly becoming an essential asset for businesses and professionals who are seeking to land contracts for public and private projects.

A surety bond is a three-party agreement designed to ensure an individual will perform according to the terms of a contract.

More specifically, it represents a promise by a surety (or guarantor) to pay one party (the obligee, who is typically a project owner) a certain amount of money if a second party (the principal, who is typically the contractor or builder of the project) fails to meet an obligation. “The agreement includes an indemnity agreement between the principal and the surety company,” says Jack Grieco, a senior account executive with Alaska USA Insurance Brokers.

In its basic form, surety bond- Grieco ing is similar to insurance in that it is a method of transferring or managing risk, Grieco says. Bonding activities are regulated by State Insurance Commissioners.

Companies that offer bonds are typically insurance companies, and the state requires that bonds be placed by a licensed property and casualty insurance broker. However, unlike with insurance—which is designed to compensate the insured against unforeseen adverse events—surety is designed to prevent a loss.

A surety bond is also a credit-based financial instrument. And according to Grieco, a surety company is only interested in issuing a promise for a principal if the principal meets a certain set of criteria. The criteria can include a good credit rating, adequate working capital, a proven track record in completing similar contracts or jobs, and good “character” on the part of the firm and its owners. “It is important to the surety company that the principal has good financial strength because the bond is not insurance; it is a promise,” he says.

“The promise is that the surety company will pay to complete the project for the obligee if the principal cannot complete the project. The principal promises to repay the surety for any payments made to complete the project.”

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Types of Surety Bonds

There are generally two kinds of surety bonds: contract and commercial. Contract bonds, commonly called construction bonds, include bid, performance, and payment bonds. In terms of their purpose, a bid bond assures that the bid is submitted in good faith and that the contractor will enter into the contract at the price specified. A performance bond promises the owner that the contractor is capable and qualified to perform the contract. A payment bond guarantees the contractor will pay specified subcontractors, laborers, and suppliers associated with the project.

Commercial bonds fall into broad categories such as license and permit, fidelity, fiduciary, public official, and court bonds. These bonds are typically purchased by companies and working professionals who need surety bonds for purposes unrelated to legal issues, construction projects, or other contracted work. They are often used to reinforce laws such as license and permit regulations.

The bond being sought is dictated by the nature of the project or work involved. For example, performance and payment bonds are project-specific and are often required on construction projects where the owner of the project is using public funds to pay for the work, according to Christin Hubble, a vice president and senior account manager with Bellevue, Washington-based Parker, Smith & Feek. License and permit bonds relate to compliance with Alaska state or municipal statutes and are required by many types of businesses other than just construction contractors.

“Both of these types of bonds are Hubble intended to protect the interests of the general public by creating a financial incentive for businesses to comply with the laws governing their activities and/or perform the obligations of their contracts,” says Hubble, who is based in Anchorage.

Underwriting Requirements

The bonding process largely depends on the type of surety program required, says

Chris Pobieglo, president of Business Insurance Associates. For instance, an individual who’s qualifying for a million-dollar-plus bond will have to provide financial statements prepared or reviewed by a certified public accountant. Resumes of the owners and key staff, project histories, an organizational chart, equipment lists, a business plan, and possibly a personal financial statement may also be required. In addition, the person might need to provide a perpetuation or contingency plan with life insurance policies for the owner and/or key employees.

Having a line of credit may also be helpful, as it shows the individual is prepared to handle contingencies. “The surety company needs to be assured that if you run into a problem on a project, you have the financial means to solve it,” Pobieglo says.

In many respects, getting bonded is similar to the process of pursuing a bank loan, Pobieglo says, so principals need to put their best foot forward during the underwriting process. Surety companies want to deal with businesses that are experienced, professionally-run, and dependable, and they are meticulous about the decisions they make during the underwriting process. “If the company says no to a bond, it’s not because they don’t want to work with you, it’s because they think a project may not be suitable for you,” Pobieglo says. “You should view your surety as a key asset and partner.”

Jay Miley agrees. As a senior vice president and surety practice leader with Marsh & McLennan Agency, he considers his firm to be a professional advisor for clients and part of their financial team.

“As a broker, I feel like we work for the client, but we also try to bring in a client that will not bring in a loss to the surety,” he says.

The broker’s recommendation of the potential client is very important, Miley says. During the underwriting process, the surety company relies heavily on the relationship of the broker and potential client.

Marsh & McLennan, which generally works with larger businesses needing contract surety bonds, takes a comprehensive approach to assisting clients. First, Miley collects the client’s pertinent information: a business plan,

Alaska Business Monthly | March 2016 www.akbizmag.com

CPA-prepared financial statements, a bank’s letter of recommendation (detailing average cash balances and lines of credit), statement of qualifications, resumes of key staff, and references from suppliers/vendors. Then he submits the information to three to five sureties that would be the best fit. He also goes with the client to “interview” the surety and, ultimately, helps the client evaluate the surety’s program, rates, financial rating, and experience. “We want to make sure we have an underwriter that understands the risks they are undertaking,” he says.

It can be challenging to get a bonding program set up for a new contractor with a scant track record. The credit report is the most critical requirement that owner(s) must provide in order to set up a surety program for the first time. “Most surety companies require the principal owners to have a credit score of 680 or higher for consideration for a surety program,” Grieco says.

Preplanning is the key. A contractor who is beginning to take on larger jobs and may soon be in position to start bidding jobs should plan ahead and work closely with a commercial insurance broker to get “pre-qualified” with one or more surety companies.

It could also be helpful to secure a Small Business Administration bond guarantee.

The Small Business Administration helps

small contractors by guaranteeing bid, performance, and payment bonds issued by participating surety companies for contracts up to $6.5 million. “A contractor qualified with the Small Business Administration may have preference with some surety companies,” Grieco says.

antee backing them,” Armfield says.

In addition to collecting basic project-specific information, surety companies expect to receive regular financial updates and periodically meet with contractors to understand their businesses and capacity to perform the work they are seeking to bond, Armfield says. “The process of Underwriting Process securing a specific bond can be as and Timeframe Vary easy as a phone call if the groundThe difficulty of obtaining a surework is laid on an ongoing basis by ty bond also depends on the type a proactive surety broker,” he says. of bond involved. For instance, Regarding the timeframe, it can many surety companies view litake anywhere from a few days to censes and permit bonds as moda few weeks to secure a contract est credit risks, and there are mulor commercial bond for someone tiple facilities in place to secure Armfield who doesn’t have an existing surethese bonds with relative ease, acty relationship in place or who is in cording to Guy Armfield, a vice president and need of a new one, Hubble says. Much of the account executive with Parker, Smith & Feek. timeframe depends on the quality of the inArmfield works in the company’s Bellevue of- formation received and the speed at which the fice and maintains a large book of construc- business can provide the information to their tion clients who require bonding in Alaska. broker. “For clients with an ongoing facility in However, performance and payment bonds place, typical turnaround time for receiving a are a more complicated product to secure and bond they request is one to two days,” Hubble lend themselves to long-term exclusive rela- says. “However, we have the ability to provide tionships between contractors and a surety. same-day service if a last minute need arises.”

“Surety as a line of business is written with In terms of pricing, surety bond premithe objective of zero losses; therefore, under- ums vary according to the contractor’s fiwriters need/want to know as much about a nancial health and wherewithal. Premiums company as possible before providing a guar- run from 1 percent for established prin-

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69

cipals to 2.5 to 3 percent for harder risks, such as a company undertaking an unusually-large or challenging project.

Surety Trends in Alaska

There are a number of interesting trends taking place with contract and commercial bonds in Alaska. On the contract bond side, Grieco is seeing greater capacity and competition on the part of surety companies, just as with insurance markets in general. “This has resulted in surety companies being willing to extend more dollars and more competitive rates to contractors with strong track records and financial health,” he says. “This allows contractors to be more competitive with their bids.”

Grieco is also seeing more large contractors requiring their subcontractors to carry bonds on jobs, resulting in an increased cost to the subcontractor and the overall job. There are also increased requirements from federal and state government entities for both contract and commercial bonds on specific programs, as well as higher bond amount being required. “A good example is the increase in the amount required for contractor license bonds that the state of Alaska implemented in late 2015,” he says.

In addition, Grieco says more contractors are using alternative financing arrangements, such as certificates of deposit or lines of credit from a credit union or bank, in lieu of a surety bond, in situations where the project owner will accept these in lieu of surety bonds.

Pobieglo has also noticed some interesting surety-related trends happening in the state. For instance, there have been more claims related to auto dealer bonds, which tend to be riskier. “Banks that provide credit to auto dealers are asking them to have a bond on file,” he says.

As another trend, Pobieglo is seeing that some “semi-quasi” government organizations have gone to requiring bonds on any size project.

Additionally, Pobieglo says a number of new sureties have entered Alaska, creating a “contractor’s market.” Surety companies are now offering higher capacity at lower rates.

The increased interest in the surety business makes sense, given its profitability. “The claims and defaults have declined in recent years, and a lot of the companies have been running pretty good loss ratios,” Pobieglo explains.

To be adequately prepared to capitalize on the surety market, Pobieglo advises clients to choose a good broker, to keep their resumes and business plans current, and to always have a back-up surety in place to avoid being caught off guard.

R Freelance writer Tracy Barbour is a former Alaskan.

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Alaska Business Monthly | March 2016 www.akbizmag.com

Commercial Insurance Employee Benefits Personal Insurance Risk Management Surety

CONSULTANT’S CORNER

Creating a Transferable Business Is my company too dependent on me?

By Mel B. Bannon Author’s Note: This is the first of a series of articles on “Creating a Transferable Business.” In this article, we try to help owners understand why they should measure and manage the degree to which their company is dependent upon their individual efforts. We refer to this measure as the “Owner Dependence Score.”

A

majority of private businesses are highly dependent upon an owner’s individual efforts in order to run efficiently. However, many owners want to be more independent of their businesses. Most owners also understand that if they are a critical part of each major part of their business, then it is going to be very difficult to grow the business and/or to have the business transition to a new owner. And, as a result of not having a transferable business, owners stand to lose much of the value that they have created in their companies.

Owner Dependence is a Significant Issue Privately-held businesses are often centered on the owners who build them. These owners are not only active participants in the company, they also hold onto critical decisions-making processes in the business. As a result, if/when the owner is not available to continue working in their business, the business suffers, and in some cases fails, with their absence. The logical extension of this process is that the businesses with a high level of owner dependence can be very difficult to transfer to another owner and the company is at a very high risk of quickly losing value. It is also important to note that for most owners, their business is the biggest part of their wealth. If they cannot transfer the value of that business to someone else, they may lose millions of dollars in wealth.

Key Management— A Path Forward Another reason for understanding your Owner Dependence Score is to provide better guidance to your key managers as to the future of the company.

Many baby boomer owners have managers in their mid-forties and early fifties who are committed to the owner’s company but are also asking about the future of the business and its ownership. They want to know about their careers and where their futures lie in regards to the succession planning for the company. Successful owners engage these managers in meaningful conversations about the running of their companies, but 72

not all owners do so with the future in mind.

Nor are they able to focus those conversations on the owner reducing the company’s dependence on them individually so that the business will continue without them.

Knowing your Owner Dependence Score in advance of succession planning will help set the stage for engaging key management members in these important discussions.

Contingency Planning— Peace of Mind for Your Family Many owners who have companies with high levels of dependence leave messes behind when those owners can no longer run their companies due to age, sickness, or some other form of disability or death. When you know your Owner Dependence Score, including the specific areas where you need to focus on building or delegating certain jobs, you are in a position to protect your largest asset—your business—and avoid the situation where a mess is left behind for other, less qualified family members to deal with.

Measuring and Managing Owner Dependence Leads to Better Growth and Value Many owners of privately-held businesses often think that growing their company and making it more valuable will translate into receiving a higher value at the time of transfer. Unfortunately this is not always true—there are many factors that affect the successful transfer of a business which go beyond cash flow. One factor is the level of dependence the business has on an owner.

A potential buyer or future owner likely will not want to purchase a business that, although may have a high value, is too dependent on the owner. So if a business is too dependent on the owner, it may be a lot harder for you to transfer your business. Alternatively, you may be looking at a structure for a transaction that holds back a lot of the value until the business proves to be able to run successfully without you.

Creating a Transferable Business

There are many ways that you can grow your business and make it more transfer-

able to a future owner. The first step is to measure your owner dependence and determine your Owner Dependence Score. Following that, your next steps will be to work with your key managers, understand who potential buyers might be, then figure out how to increase the value of your company to make it worth more at the time of your ultimate exit. The Creating a Transferable Business model was designed to assist owners with this process, beginning with measuring and managing owner dependence.

Concluding Thoughts

Knowing your company’s dependence on you is an important factor that will assist you in growing your company, as well as impact the future transfer of your business.

The more dependent the business, the slower it will grow and the less transferable it will likely be. If you know how dependent the business is on you early on, including the specific areas that you can improve upon, you will be able to create a plan that will help you to move away from the business at some point and create a transferable business. R Mel B. Bannon, CLU, ChFC, RFC, is a registered representative of Lincoln Financial Advisors, a broker/ dealer, member SIPC, and offers investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, 31111 Agoura Rd., Ste. 200, Westlake Village, CA 91361 (818) 540-6967 or 1500 W. 33rd Ave., Anchorage, AK 99503 (907) 522-1194. Insurance offered through Lincoln affiliates and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances.

Alaska Business Monthly | March 2016 www.akbizmag.com

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SAFETY FIRST

Simple Sabotage: Basic Rules to Influence Productive and Safe Behavior

By Brian McKay

I

subscribe to an email list service called Atlas Obscura whose mission is to send me interesting diversions throughout the week— every week—along with a bit of suggestive advertising. Topics may include anything from the best haunted houses to visit in Michigan, interesting places to take your dog, or any of a long list of important items, places, or occurrences happening in the world without me.

One of these diversions recently piqued my interest more so than the others. It was a small offering about a declassified piece of World War II nostalgia called the Simple Sabotage Field Manual.

The Simple Sabotage Field Manual, dated 17 January 1944, was written under the guidance of and signed by none other than William “Wild Bill” Donovan himself. Wild Bill was America’s first lead spy. He is known, according to Wikipedia, as the “Father of Central Intelligence” and during World War II ran the Office of Strategic Services, better known as the OSS. The job of the OSS was to coordinate the espionage activities between US Armed Forces and other allied powers, execute missions, and generally wreak havoc on axis powers. This manual was part of that havoc planning.

Intent is to Teach

The intent of the Simple Sabotage Field Manual is to teach a low level of “simple sabotage” to personnel across a broad range of activities, including personnel working “behind the lines.” Simple sabotage refers to acts or omitted activities that don’t require any “formal” sabotage activities such as the use of explosives or any other complex, multi-discipline operations.

Simple sabotage is based on “universal opportunities to make faulty decisions, to adopt a non-cooperative attitude, and to induce others to follow suit” according to the manual. Simple sabotage acts are those that may not even be realized at first glance but will strategically lessen the overall effectiveness of opponents through decreases in efficiency, bottlenecks, worn out equipment, or incorrect field orders.

These acts can be committed by the common man or the “citizen saboteur” with little preparation or tools, just the right havoc wreaking attitude which may, after all, be the “human element” in the overall act of sabotage “responsible for accidents, delays, and general obstruction under normal conditions.” My radar for “things that I can steal and use in safety management” pinged after reading that last passage in the manual. The “human element” responsible for accidents and delays? General obstruction and normal conditions? These are the bread and butter of my life’s work.

The Simple Sabotage Field Manual would actually be a pretty decent safety manual if it were written in a “don’t” rather than a “do” frame of mind. The following passage from the manual illustrates 74

this point: “In basements where janitorial supplies are kept, allow oily and greasy waste to accumulate as this will sometimes combust.”

For the simple saboteur, this is gold. Such housekeeping issues are routinely overlooked even in today’s risk-averse working conditions, but accumulating waste in an out of sight, out of mind utility closet is a recipe for a disaster for which little, if any blame could ever be assigned. For the simple saboteur, this is a good day’s work; although not as overt as blowing up a bridge, this kind of thing can still destroy an office or a manufacturing facility.

The take-away for today’s safety professional or business owner is to open up those closets, review housekeeping, and review procedures for oily waste and accumulation areas before becoming the victim of the careless saboteur.

Other activities identified in the manual brought more safety messages to mind.

Activities: Let cutting tools grow dull. They will be inefficient and slow down production. Power driven tools are never efficient when dirty and electric contacts and lubrication points may be fouled by insertion of foreign matter.

Safety Message: A good tool inspection program is needed to keep the process moving effectively.

Activities: Allow engines to run with low oil levels for extended time, douse hot machines with cold water or other coolants, allow loose connections on hoses and clamps, do minimal inspections, don’t inspect tires or rims, don’t tighten all the bolts evenly on the rims, and mix light and heavy oils for increased wear and tear.

Alaska Business Monthly | March 2016 www.akbizmag.com

Safety Message: Vehicle and heavy equipment inspections are often times a tedious and time consuming part of the job. However, operating equipment in less than optimal conditions leads to premature loss of efficiency and early equipment failure in addition to operating at less than prescribed safe conditions.

Activities: Mismark and mismatch solvents and other operating chemicals at the facility. With a little bit of luck, the simple saboteur can induce premature corrosion of machine parts and cutting jags in addition to premature wear on vessel walls.

Safety Message: Mark all chemicals and have the operational discipline to run an effective Hazard Communication program which deals with the proper use and storage of any facility’s chemical inventory. (Interestingly, the use and abuse of chemicals in industry is a common theme found in the manual and is historically common within industry. Even today, OSHA’s Hazard Communication Standard is still within the top four of most frequently cited standards during workplace inspections.)

General Interference

The acts of the simple saboteur are designed to be elusive so the blatant active error or omission of procedure may not be immediately felt within the organization. But, the cumulative effects of many of these hassles can lead to inefficient workplaces, a loss of cohesiveness in the operations, and overall lowered morale as time is taken up with responding to the minutiae of these small hassles, which brings us to the psychological effect of the simple saboteur.

We wake up every morning with a capacity for making decisions, thinking clearly, and using all our talents to the best of our ability.

Some mornings are better than others, and we are fully equipped to handle whatever our organizations can throw at us—up to the point where our decision making ability decreases.

There is anecdotal evidence to suggest that the less time we spend on low impact decisions, the more time we have to make the big differences in our lives. For example, it has been said that Steve Jobs wore his iconic jeans and black turtleneck daily so that his capacity for making decisions was not wasted on deciding what to wear to work.

Regardless, a common target for the simple saboteur, according the manual, is entitled General Interference with Organizations and Production and focuses on bureaucratic ineffectiveness and other social animosities identified by theorists such as Max Weber, who was one of the great thinkers in the development of organizational psychology.

Weber’s early work influenced the development of hierarchy in the workplace, www.akbizmag.com

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75

chain of command, and the concepts of consistency. He believed that through exemplary performance in assigned tasks, organizations would find operational efficiency and perfection with the overall good of society. Henry Ford’s production line and strict adherence to assigned work tasks were likely influenced by these notions.

Subtle Influences

There are subtle influences from Weber’s bureaucratic theories at play in the Simple Sabotage Field Manual. Weber thought about the bureaucracy of large industrial enterprise and promoted an efficient workplace through rationality and strict adherence to assigned roles and the chain of command. Any disruption in the chain of command, any thoughts or questions outside assigned work responsibility, or the retributive assignment of simple work tasks to exacting standards or clarification all work against the efficiency of the organization and serve to lower morale—perfect outcomes for the hobbyist saboteur.

Here are a few examples, inspired by the manual, to use when one’s goal is simple sabotage:  Make travel as inconvenient as possible for enemy personnel. Make mistakes in issuing tickets and leave gaps in the journey; book two people on the same seat. Slow down the process by doing things by hand or by laborious double checking. Make sure luggage doesn’t make it to the desired destination. While there is not necessarily a safety message here, there is something to say about the quality of the experience, which can lead to a foul mood, short temper, and loss of concentration on the next trip through Prudhoe.  When possible, refer all matters to a committee for “further study” and make the committees as large as possible, never less than five people, assuring that decisions are hampered and distractions are maximized.  Refer back to matters discussed at the last meeting and attempt to re-open the question and advisability of that decision.  Don’t order new working materials until all current stocks have been depleted assuring a production slowdown. When placing orders, go for the low quality materials.

It’s actually kind of funny. The same targets for the saboteur during World War II are still with us today, though for less deliberate reasons—we hope. Their impact on our wellbeing, however, is still very relevant. Dealing with these issues on a daily basis erodes our capacity for effective decision making, lowers morale, and hinders innovation. Volumes 76

have been written on the subject of organizational effectiveness and the impact to the business world, so we can stick with how this affects safety performance. For that, there are a few more gems in the manual to consider, such as when training new workers give incomplete or misleading instructions.

There is nothing more important than the first couple of days on the job for a new employee. These people are taking in everything from first impressions, attitudes from their co-workers, organization clues from the HR process, and the general appearance organizational processes. It is essential that employers get this right through a consistent approach, consistent personnel, and consistent resources so that each new employee is starting out on the right path. At this point, safety orientation and initial training for the job needs to be energetic and upbeat, coming from experts in their areas.

Another simple saboteur trick is to never pass on skills and experience to a lesser skilled or new employee.

For the sake of safety performance, essential jobs skills and safe procedures are the most important elements that need to be passed on to new employees. If a business has a mentorship program, this is the time to make sure that mentor has the energy and the drive to shape the future safety attitude of this new employee. Put leaders in these positions at this point; it will pay off in the end.

This was a fun assignment and article to write. I consider myself a bit of a history buff but I really never considered the role of the simple saboteur in any of the world’s great wars, but you can imagine their cumulative impact and subtle influences on their targets. For your own enjoyment, I recommend downloading a copy online at simplesabotage.com/wp-content/uploads/2015/09/ Original-Manual.pdf, or I understand that a book has been written called Simple Sabotage: A Modern Field Manual for Detecting & Rooting out Everyday Behaviors That Undermine Your Workplace by Robert M. Galford, Bob Frisch, and Cary Greene. I don’t have that book, yet, but I will get one. R Brian McKay is an Environmental, Safety and Health (ES&H) Professional whose interests include the development and implementation of evidence based ES&H management practices across all size organizations and industries. He has a Master’s Degree in Public Health and is a Certified Industrial Hygienist (CIH) and Certified Safety Professional (CSP).

Contact him at bemckay@gmail.com or (907) 406-4296.

Alaska Business Monthly | March 2016 www.akbizmag.com

HR Matters

By Kevin M. Dee

Morale Boosters for Those Left Behind Acknowledge the emotional toll of a layoff

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here is a group exercise called Lifeboat where there are limited seats in the lifeboat (always less than the group size) and group members participate in the selection of who gets a seat and who stays behind. Each person gets one minute to say why they should be chosen for a seat. The exercise causes a lot of self-examination and is intense and emotionally a catalyst for internal conflict. Layoffs are also like that and often worse. Those people let go will grieve and move on over time. If done right, those laid off will get assistance and eventually find a new way forward in their careers. But they are not the only ones who are affected and go through an emotional rollercoaster. Everyone who is left, “the survivors,” will also go through duress and similar stress. However, there are things that managers can do that will go a long way to help those left behind.

portunities that can be realized. But, trust is required and absolute honesty must accompany this effort. Even just talking about it initially as a group can go a long way to start the healing process.

Organizations that understand change management are by far more responsive to market needs and take less time to meet and effect change—whether anticipated or not. John Kotter in his book “Leading Change” outlines an 8-step model for transformation in an organization. Those steps for change management are (1) identify the urgency of change, (2) form a strong nucleus, (3) create new vision for the change, (4) notify everyone of the vision, (5) empower others to act on the same, (6) create short term wins for those supporting, (7) maintain the state of emergency, and (8) anchor changes in corporate culture.

What’s Going On? The first and foremost thing that will determine whether or not individuals survive or leave the lifeboat (the organization) will be the culture that existed prior to the layoff. Was the organization a good or great place to work?

Did management and employees demonstrate good social and emotional intelligence on how they treated each other? If the answers are “no” then businesses are in for a rocky ride and the organization may not make it.

Secondly, acknowledge what is really going on with the company. Will there be more layoffs, reductions, etc.? Surviving a layoff is like living through a car crash where one person survived but others did not. Expect a grieving process to occur amongst those left behind. If the business has a compassionate workplace culture then there is light at the end of the tunnel.

So what can be done to support those left behind? If a business supports those left behind in the transition then there are op-

As part of supporting those left behind, one big opportunity is to create more self-directed work teams that have a mission wherein they figure out the most efficient, cost effective manner to accomplish it. Management becomes a coach and support service that assists in tracking and reporting results versus directing and controlling. This is very uncomfortable for managers who have always worked from a command and control style. It means investing in work teams who must now work “to do more with less.”

The organization benefits tremendously by engaging and allowing employees to own their results. Let’s face it, we are at our best when we are under stress and aligned as a team and committed to solving a common problem. Getting to that place and creating that type of teamwork is not always easy, but when it happens then it is magical. When I poll people in meetings, usually everyone has had an experience of a high performance team that accomplished

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One Big Opportunity

something significant. Every person over many years of doing this work has always said they considered that some of the best times of their lives and would love to have that experience again.

In Perspective

To put layoffs in perspective, begin by acknowledging the problems and engaging people in meaningful conversations. The company has experienced a loss and it is natural to grieve it. Those left behind will now have to pick up the pieces and keep going. Everyone wonders if they will be the next laid off, and how is the company really doing? Management’s message is often, “Now you will have to do more with less!”

Is it any wonder morale takes a big hit in these situations? Instead, acknowledge what is going on within the group and with each person as it comes up.

If an organization can acknowledge the emotional toll of a layoff, rebuilding after a tragedy/layoff is an opportunity for people to come together and form a stronger team.

By being scrupulously honest and direct you will find employees more willing to say, “How can we help?”

R Kevin M. Dee has a master’s degree from Vanderbilt University and is the president of KMD Services & Consulting.

He has more than twentyeight years of experience providing leadership development, organizational development, and human resource services in Alaska and internationally. Contact him at mail@kmdconsulting.biz.

Alaska Business Monthly | March 2016 www.akbizmag.com

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TELECOM & TECHNOLOGY

Alaska’s Can-Do Approach to Telecommunications From telegraph to broadband

By Heather E. Hudson

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vercoming the challenges of connecting Alaskans scattered in remote communities to each other and to the rest of the world has required both technological ingenuity and a commitment to provide service where networks are costly to build and maintain and customers are few. However, the story of connecting Alaskans involves much more than technological innovation and geographical challenges of vast distances and extreme climate—it includes advocacy by government agencies and the private sector, innovative strategies to attract investment, persistence by Alaska politicians and entrepreneurs, and creative techniques of putting telecommunications to use for Alaska’s development.

“Connecting Alaskans: Telecommunications in Alaska from Telegraph to Broadband” is a book I wrote that was published last year. This article is a snapshot of the book, which highlights the technologies, investments, and ingenuity that have helped to link Alaskans with each other and with the outside world. In the book and this article, I also analyze the technical, policy, and regulatory issues that Alaskans have faced from the first telegraph line to the broadband era and highlights some of the lessons learned and issues that still need to be addressed.

Linking Alaskans

After an aborted private sector venture in the 1860s to construct a telegraph line from the United States and then-British west coast through Russian Alaska and Siberia to Europe, it was thirty-five years before a telegraph line would actually be built across Alaska. Led by Captain Billy Mitchell, the US military overcame obstacles of frozen tundra in the winter and muskeg and mosquitoes in the summer to build a telegraph line to link its garrisons, initially relying on a link through the Yukon to reach Skagway, where messages were sent by ship to 80

Seattle. Eventually, submarine cables were laid from southeast Alaska to Washington State to complete an all US route.

First known as WAMCATS (the Washington-Alaska Military Cable and Telegraph System) and later ACS (the Alaska Communication System), the military’s network carried both civilian and military traffic, but was owned and operated by the military until privatized by an Act of Congress in 1969, and sold to RCA (the Radio Corporation of America). Thus, for much of the twentieth century, Alaska’s communications system resembled governmentowned networks in Europe rather than the commercially-owned and operated networks in the United States. Like European operators, the ACS received federal government allocations for operations and maintenance and could not re-invest its own revenues but had to turn them over to the US Treasury. Despite growth in Alaska’s population and economy, there was little incentive for the military to upgrade and expand facilities for civilian services. However, World War II and the Cold War did provide the rationale and funding to improve military communications, with new technologies such as the White Alice troposcatter system and the US portion of the DEW (Distant Early Warning) Line built to enhance national security on the northern Pacific and Arctic frontiers.

Reliable Communications

In the Bush, high frequency radios had been the only link between most villages and doctors, police, and government agencies. These two-way radios were often both unreliable and inaccessible. In the early 1970s, experiments using NASA’s ATS-1 satellite to link Alaska village clinics to regional hospitals demonstrated that reliable voice communications could make a difference in rural healthcare, not only to get help in emergencies but also to enable doctors at regional hospitals to advise village health

A major theme has been adoption of innovative technological solutions to cope with Alaska’s climate, terrain, and isolation. A submarine cable across Norton Sound that kept breaking from the pressures of waves and sea ice was replaced with one of the world’s first commercial wireless circuits. aides on diagnosis and treatment of their patients. Educators and broadcasters also experimented with the NASA satellites to transmit community radio programs and educational videos to schools and community centers. Participants in these experiments became advocates for permanent satellite facilities for all of Alaska’s remote communities. Yet demonstrations and experiments were short-term; turning them into stepping stones to operational service required the commitment and ingenuity of federal and state government officials, Alaska business leaders, and researchers.

Their efforts culminated in an appropriation by the Alaska Legislature in 1975 of $5 million for the purchase of satellite earth stations for more than one hundred villages; the satellite facilities were installed and operated by RCA Alascom.

In the 1970s and 1980s, state communications officials and consultants helped Alaska carriers gain access to a national revenue pool that could subsidize costs of providing service in Alaska, thereby helping to keep communications affordable for Alaska residents. Despite Alaska’s small markets and high capital and operating costs, competition began in interstate long

Alaska Business Monthly | March 2016 www.akbizmag.com

distance, followed by intrastate and eventually some local competition. Deregulation and disruption in the 1980s led to turmoil in the industry in the 1990s that became known as the “phone wars.” By the end of the decade, mobile cellular service was being installed, with expansion and upgrading of mobile services throughout the early years of the new century.

With the advent of the Internet era in the late 1990s, Alaska was once more a communications pioneer in offering online access to state government services ranging from hunting and fishing licenses to applications for annual Permanent Fund disbursements. Alaskans began to sell products online and to promote wilderness activities and ecotourism through their websites.

Alaska’s resource industries, aviation and shipping, and retail and service industries now use telecommunications networks for logistics, back office support, reservation systems, financial transactions, and other applications.

Recurring Themes

Several themes recur through this review and analysis of Alaska’s telecommunications history. The Alaska experience also yields lessons relevant for future Alaska communications planning and policy, for

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other remote areas across the North, and in other rural and developing regions.

Innovations in Technology

A major theme has been adoption of innovative technological solutions to cope with Alaska’s climate, terrain, and isolation.

A submarine cable across Norton Sound that kept breaking from the pressures of waves and sea ice was replaced with one of the world’s first commercial wireless circuits. Further innovations in wireless technology brought the means to extend the networks, with White Alice troposcatter antennas and microwave relay towers.

But it was satellite technology that made reliable communications for all of Alaska’s settlements not only possible but achievable when innovative engineers designed small earth stations that could be assembled from components flown to villages in bush planes. Today, planners attempting to extend broadband to every community face similar challenges to power mountaintop repeaters and lay optical fiber across tundra and under grinding coastal ice.

Technological innovation was also critical to the introduction of competition in Alaska telecommunications. Carriers that estimated costs based on technology and practices used in the Lower 48 concluded

that competition in Alaska’s small market was impossible. However, innovations in satellite technology in the 1970s that were adapted for Alaska resulted in costs that were significantly lower than estimates from the major carriers.

Innovative Uses and Applications

From the earliest days, Alaskans have also been innovative in how they use communications technologies. They sent messages via radio broadcasts and two-way radio to isolated villages, used a shared audio channel on a satellite to implement telemedicine, obtained rights to educational programs for teachers to download overnight, enabled rural Alaskans to testify in state hearings via teleconference, marketed Alaska crafts and other products online, and developed software to preserve and teach indigenous languages.

The Importance of Advocacy

Many of the regulatory and policy victories that made it possible to extend reliable communications to remote villages for Alaskans resulted from engagement of key officials from both the public and private sectors. The political initiatives were bipartisan, involving Democratic and Republican governors, senators, and state legisla-

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tors. Governors Egan and Hammond were committed to getting affordable satellite communications to rural Alaska. Senators Bartlett, Gravel, and Stevens also played significant roles in Alaska telecommunications, including setting the terms for the sale for ACS, arranging Alaska participation in NASA satellite experiments, and obtaining federal funding to support Alaska communications.

Private sector and academic champions have also helped to expand and improve Alaska communications. Broadcaster Augie Hiebert first traveled to Washington, DC, in 1946. In the 1970s, he led initiatives to get satellite television to rural Alaska; he also organized “Alaska Day” at the Federal Communications Commission so that Alaska broadcasters could showcase their activities and explain their needs for regulatory waivers and exemptions. Researchers from the University of Alaska, Stanford, and other institutions advised on technology and regulatory issues, providing the evidence the state needed to advance its agenda of extending rural communications.

Public-Private Partnerships

Partnerships between the private sector and the government have been important at several stages in Alaska’s telecommuni-

cations history. Private sector contractors supplied equipment and built facilities for the military’s ACS and White Alice systems. In the 1970s, the state government appropriated funds for the purchase of one hundred small satellite earth stations that were installed and operated by RCA Alascom. The state also provided funds to lease satellite capacity for transmission of a single channel of commercial and public broadcasting to the Bush, a system now known as ARCS (Alaska Rural Communications Service) that continues to operate today.

State Planning

Governor Egan established an Office of Telecommunications in 1972. The Office of Telecommunications became a focal point for identifying goals and developing strategies to improve access to telecommunications, particularly in rural Alaska. Governor Hammond eventually abolished the Office of Telecommunications and placed responsibility for telecommunications operations and services in the Department of Administration, where the focus shifted to internal government telecommunications requirements rather than the needs of the state’s residents. Some legislators also played important roles, notably Fred

Brown and later “Red” Boucher chaired committees concerned with Alaska communications. The Telecommunications Information Council established by Boucher and later chaired by Lieutenant Governor Fran Ulmer once again provided a focal point for setting goals and determining priorities until its abolition in 2005

by Governor Murkowski. In 2015, a State Broadband Task Force recommended the establishment of an Office of Broadband Policy within the state government. The state clearly needs to reengage at a senior level in telecommunications planning and policy.

Role of the Federal Government

The federal government has played many significant roles in Alaska telecommunications. The military both funded and operated the facilities that provided commercial communications services until 1969.

Threats to national security prompted construction of the White Alice troposcatter network and the DEW Line. NASA satellites demonstrated the benefits of this new technology for reaching remote communities and provided the evidence state officials needed to make the case for investment in commercial satellite facilities.

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The telecommunications industry was long considered to be a natural monopoly; it appeared that its services could be provided most cost-effectively by one integrated provider.

Technological innovations beginning in the 1960s gradually eroded this paradigm, resulting in competition ranging from customer premises equipment (such as fax machines and modems) to satellite systems. helped cooperatives and small “mom and pop” companies to install local networks and later to upgrade their facilities; federal subsidies for high cost services have helped Alaska carriers to survive while keeping services affordable for their customers.

Alaska’s telecommunications providers and users have also benefited significantly from federal universal service funds. The Telecommunications Act of 1996 mandated connectivity subsidies for schools and libraries and for rural health centers.

Alaska soon had the highest percentage of participating schools in the country, most of which were in isolated villages where they connected to the Internet via satellite. Today, Alaska remains one the highest per capita beneficiaries of the Schools and Libraries Program, also known as the “E-

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rate.” Alaska now receives the largest absolute amount of funding as well as highest allocation per capita of any state from the Rural Health Care program. Today, the focus of federal subsidies to providers is on extending affordable access to broadband, with new subsidy regimes being introduced as part of the implementation of the National Broadband Plan. In the fifteen years from 1998 to 2013, Alaska received a total of almost $3 billion from these funds, or 3 percent of the total awarded, despite having only 0.23 percent of the US population.

Special Treatment for Alaska

Alaskans have frequently sought—and received—special treatment from federal regulators. Broadcaster Augie Hiebert was able to get a license for a high powered

FM station in Prudhoe Bay to rebroadcast an AM station from Anchorage because “things are different in Alaska.” The Alaska Public Broadcasting Commission managed to get village transmitters affiliated with all four television networks so that the villages could receive a single state-funded satellite channel with combined network programming. Recently, Alaska carriers have sought waivers from some requirements mandated under implementation of the Connect America Fund.

Competition and Consolidation

The telecommunications industry was long considered to be a natural monopoly; it appeared that its services could be provided most cost-effectively by one integrated provider. Technological innovations beginning in the 1960s gradually eroded this paradigm, resulting in competition ranging from customer premises equipment (such as fax machines and modems) to satellite systems. Competition in services began with early data communications and expanded to long distance communications and eventually to local services.

In Alaska, the rationale for monopoly was based primarily on the high capital and operating costs of reaching customers scattered over a vast land area and the limited

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revenues from a small population. However, entrepreneurs who introduced innovations in satellite technology, and later in digital and mobile communications, demonstrated that competition could succeed even in rural Alaska.

Much of this competition has been facilities-based, with separate satellite earth stations and cellular antenna towers installed by each carrier. Recently, there appears to be a new era of consolidation in both fixed and wireless services, with a single carrier providing a terrestrial backbone network in some rural regions, and buyouts resulting in fewer players in mobile networks.

Native and Consumer Engagement In the 1970s a consumer advocacy organization included communications in the issues it researched and publicized. In the 1980s, there was a Telecommunications Users Advisory Consortium. Today, consumers and other users are virtually silent about the availability, affordability, and quality of service of their communications services. There is no organization representing communications consumers in Alaska, ranging from individual residents to small businesses, nonprofit organizations, and social and educational services.

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In addition, few Alaska Natives are engaged in representing their needs as consumers of communications content and services. Yet as the majority of residents in much of rural Alaska, Native Alaskans should be particularly concerned about the availability and affordability of telecommunications services.

Ongoing Challenges

Innovation, advocacy, and perseverance have been key to Alaska’s achievements in telecommunications. Rural Alaskans continue to adopt new technologies and services as they become available in their communities. Most villages now have cellular service, although coverage remains limited offshore and on the land and rivers where emergency communications in harsh weather could save lives. But there is still much more to do, including extension of fixed and mobile broadband services throughout the state and engagement of all Alaskans in Alaska communications planning and policy. The goal of providing universal access to broadband that is both affordable for users and sustainable for providers is the latest Alaska communications challenge.

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Dr. Heather E. Hudson is a Professor of Public Policy at the Institute of Social and Economic Research at the University of Alaska Anchorage.

Hudson was ISER’s director from 2010 through 2012. She came to ISER from the University of San Francisco, where she founded the Telecommunications Management and Policy Program. She has conducted research in Alaska, northern Canada, and more than fifty developing countries. Her professional experience includes research on applications and effects of new communications technologies and policies to extend access to communications, particularly in remote and developing regions.

She has also developed and taught graduate courses in communications policy, international communications, communications project planning and evaluation, and trends in new technologies. Hudson is the author of “Connecting Alaskans: Telecommunications in Alaska from Telegraph to Broadband.”

Contact her at 907-786-5408 or hehudson@uaa.alaska.edu.

Alaska Business Monthly | March 2016 www.akbizmag.com

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VISITOR INDUSTRY

Winter Tourism on the Rise in Alaska Take a pie-making class, book a tour of Dallas Seavey’s kennel, learn to photograph the Northern Lights

By Heather A. Resz

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t’s an exceedingly pleasant Saturday breakfast, sipping coffee and watching an ever-changing canvas of snow-covered trees, lakes, trails, and homes—and several moose—scroll past the windows of the dining car on the Alaska Railroad’s Aurora Train.

I smile at the sight of a man who stopped to wave hello to the train while out walking his dog.

As the train sways north carrying me to Talkeetna, my mind wanders back to a time when Wasilla, Willow, and Talkeetna were small villages that grew up along the Railbelt.

The road, and with it the modern world, reached Wasilla and Willow sooner. But for half a century, steamships and the railroad 86

were the primary transportation links between Talkeetna and the rest of the world.

I remember my friend Pat Pratt’s stories about riding the train to get to her university before the Talkeetna Spur Road was punched through. I remember sharing a meal with Dean Bunker, the man behind the wheel of the first school bus when it rolled in to Talkeetna in 1964.

Today, a century after the Alaska Railroad chose the location near the confluence of the Susitna, Chulitna, and Talkeetna rivers for its district headquarters, thousands of visitors arrive each year by train and passenger bus to stroll Talkeetna’s streets, shop at its quaint stores, eat at its cafes and pubs, and book lodging, flightseeing, and day trips.

Alaska’s visitor industry created fortysix thousand jobs statewide during peak season and generated $3.9 billion in economic impact in 2013-14, according to state numbers.

A Winter State Where Summer Travel Rules Although Alaska is the biggest and most “wintery” of all the winter states, most of the nearly 2 million people who travel here annually—1.66 million of the 1.93 million visitors in 2013-14—travel between midMay and mid-September, according to the state report “Economic Impact of Alaska’s Visitor Industry” released in February 2015.

Only 273,000 travelers visited during the winter season in 2014.

Alaska Business Monthly | March 2016 www.akbizmag.com

Alaska Railroad: Boosting Tourism for Ninety-Three Years

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Dubbed the “The Voyage of Understanding,” President Harding visited Alaska July 5 to July 26, 1923, as part of a fifteen-thousand-mile, cross-country speaking tour planned June 20 to August 4, 1923. He died of what was likely a heart attack at the Palace Hotel in San Francisco, California, August 2, 1923.

Tourist concessions in Denali also began the same year the railroad opened. Dan Kennedy received a five-year permit in 1923 to operate a series of three tent camps and a pack and saddle train extending fifty miles into the park from McKinley Park Station.

In 1937, the federal government appropriated $350,000 through the Work Projects Administration to build the McKinley Park Hotel at McKinley Park Station. The McKinley Park Hotel opened in 1939 and continued to serve visitors until fire destroyed it in 1972.

R

© Heather A. Resz

laska Railroad’s roots in tourism date back to 1923, the year service began on the 470-mile line from Seward to Fairbanks.

Ben Nauman began construction on the Fairview Inn in Talkeetna in 1920, and it was open to serve President Warren G. Harding in the summer of 1923 when he traveled the length of the line to celebration its completion.

President Harding traveled on to Curry, the halfway point on the two-day steam train trip from Seward to Fairbanks, where he stayed overnight at the Curry Hotel.

Billed as “a palace in the wilderness where accommodations are modern, inviting, and comfortable and the cuisine of highest order,” the Alaska Railroad opened the Curry Hotel in March 1923 at Mile 248.5 as the overnight stop for travelers and rail workers.

It burned April 9, 1957, killing three people.

© Heather A. Resz

Winter tourism in Alaska may be on the cusp of change, says Visit Anchorage’s David Kasser, vice president of Tourism Development and Sales.

The probable catalyst is the Go West Summit, which brought about 350 international operators to Anchorage February 22 to 25 and offers tourism-related products or services in the American West.

Although most of the companies that participated sell summer travel exclusively, Go West introduced people to winter tourism in Alaska through Adventure Day, which included a range of excursions from photo safaris to spa days to ice fishing, as well as flights to Winterlake Lodge to experience mushing or taking a class from a world-class chef, Kasser says.

The summit also offers multi-day preand post-summit tours to familiarize participants with tourism-related products along the Alaska Railroad and Alaska’s port cities, he says. www.akbizmag.com

The Wasilla Alaska Railroad Depot.

© Heather A. Resz

Alaska Railroad has special deals for Alaskans in winter.

Alaska Railroad conductor and nearly empty passenger car in winter.

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Photos © Heather A. Resz

“This whole program is going to be a huge catalyst for winter tourism,” he says.

Alaska’s recent popularity as a location for reality TV shows also helps boost interest among travelers, as well as clear up some misconceptions about the state, says Casey Ressler, Mat-Su Convention and Visitors Bureau Marketing and Communications manager.

Ressler says he often meets people at travel shows who tell him their first visit was in the summer, and now they are planning a trip in winter “to see the real Alaska.”

Hunting the Northern Lights and experiencing sled dog mushing seem to interest people most, Ressler says.

“It’s not like we shut down in winter,” he says.

“As demand grows, so do the product offerings.”

Lots to Do in Winter

There’s a lot more to do in Alaska in the winter than shivering in the dark. Rent a fat tire bike or snowshoes. Go on a Northern Lights viewing tour or sign up for an aurora photography class. Ride the runners behind a sled dog team. Try ice fishing, ice climbing, or soak in the outdoor hot springs at Chena.

For the more adventurous, book a snowmachine or ATV tour and check out some of Alaska’s hundreds of miles of trails. For 88

Talkeetna Roadhouse owner Trisha Costello (center) teaches Von (left) and Alisa (right) Lennox of Eagle River how to make a pie.

Alaska Business Monthly | March 2016 www.akbizmag.com

skiers and boarders, Alaska offers miles of groomed cross country trails and enough downhill and backcountry skiing to sate even the most hardcore vert enthusiasts.

Or, how about hopping the Alaska Railroad for a leisurely ride from Anchorage to Talkeetna to take a pie-making class and stay overnight at the Talkeetna Roadhouse?

From Anchorage, take the train to Fairbanks to experience a sled dog tour or book a guided trek to hunt the aurora.

“We are hearing more and more comments about winter,” says Bruce LaLonde, Alaska Railroad director of Passenger Marketing and Reservations. “People want to come up in the winter. They want to experience the Northern Lights.”

For guests planning an excursion to the Anchorage Fur Rendezvous Winter Festival, Iditarod Trail Sled Dog Race, or the World Ice Art Championships in Fairbanks, the Alaska Railroad’s expanded passenger service offers both weekend and midweek service between Anchorage and Fairbanks and can get passengers there in comfort on the Aurora Winter Train.

In addition to the regularly scheduled Saturday northbound and Sunday southbound services, midweek service travels north from Anchorage on Tuesdays and south from Fairbanks on Wednesdays from

February 23 to March 30.

Most of the railroad’s five hundred thousand annual passengers are from outside Alaska, LaLonde says. To encourage Alaskans to sit back, relax with their families, and let the engineer do the driving, he says special round-trip fares for adults are $269 and $135 for children ages two to eleven. Military and senior discounts also are offered.

“We decided to expand midweek service to give locals and visitors alike more opportunities to travel on the railroad during the winter season and catch all of the exciting seasonal activities and events taking place in Railbelt communities,” LaLonde says.

Learn about Making Pastry or Shooting the Aurora Von and Alisa Lennox of Eagle River booked the pie making class at the Talkeetna Roadhouse through the Alaska Railroad website after friends raved about their excursion.

Alisa is the baker in the family. Von makes really good waffles and eggs, but this will be his first—and likely his last—pie, he jokes.

Among other pie-making tricks and tips, Talkeenta Roadhouse owner Trisha Costello teaches Von and Alisa to place the ingredients for their piecrust in the mixing bowl in small piles so they can easily review what they’ve added before beginning the process

E

to combine the butter, flour, salt, and ice water into pastry. The piles of ingredients are a trick her granny taught her, Costello says. “Everything I’m telling you is from things I’ve really screwed up.”

While the area’s two largest hotels close for the winter season, the Talkeetna Roadhouse offers meals and lodging year-round, Costello says.

She said she’s glad to see local companies like K2 Aviation catering to winter guests by renting fat tire bikes and snow shoes by the hour or by the day.

Many guests also enroll in a Northern Lights photography class taught monthly by “Aurora Dora.” Her gallery in downtown Talkeenta has been open year-round for three years. And for the seven years prior she sold her art at a booth outside at the Sheldon Arts Hangar during the summer.

Now individuals and groups also may book private classes. But photographer Dora Miller’s monthly classes fill up fast.

Visit her website (auroradora.com) to enroll in an upcoming class.

Miller followed a man she loved from Brazil to Alaska fifteen years ago, only to find out her architecture license and degree wouldn’t transfer to work in the United States. So she returned to her first love: photography.

“I was born with a camera in my hand,”

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she says. “But when I was growing up I didn’t think photography could be my job because it was my passion.”

So she got a degree in architecture and spent a year working for Brazilian fashion photographer Miro before making her way north.

She still remembers being overwhelmed to the point of speechlessness the first time she saw the auroras dancing in September 2001.

“I knew I wanted to be able to capture them and share them, this beauty that for me was hidden,” Miller says.

She spent clear nights outside for the next few years chasing the aurora and honing her skills as a hunter of light in a season of dark. She’s made it her mission in life to share the aurora with the world through her photos and by helping other people take and share their aurora images.

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Dallas Seavey was a youngster running his dad’s B team—barely old enough to compete in the Iditarod Trail Sled Dog Race—when Candice Kotyk, owner of Salmon Berry Travel and Tours LLC, began taking tour groups to his Willow kennel. Since then, Seavey has won the Iditarod three times, and Salmon Berry Tours has signed an exclusive agreement to offer tours at Dallas Seavey Racing.

“We made that deal before he was a three-time Iditarod champion,” Kotyk says.

She says winter tourism is definitely on the rise for Alaska. For an example she cites the Talkeetna Roadhouse where the five-day Northern Lights Getaway tour stops overnight. Groups are small, twelve on tours and thirteen on day trips.

“When we first started, we would be the only people sleeping there,” Kotyk says.

“Now, we are never the only people.”

Keeping good employees is one of the biggest reasons the eleven-year-old business operates tours year-round, she says.

“Also, we really love winter.”

R Heather A. Resz lives in Wasilla.

She’s told Alaska’s stories for nearly twenty years.

Alaska Business Monthly | March 2016 www.akbizmag.com

Source: Dora Miller/AuroraDora.com

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ARCTIC

World Economic Forum Principles for Arctic Investment Responsible Arctic Investment Protocol adopted at Davos

By J. Pennelope Goforth

I

n Davos, Switzerland, on January 22 at the World Economic Forum the Guggenheim Partners formally endorsed a revolutionary plan for a global investment firm that fast-tracks Alaska’s future as a major Arctic player.

The Arctic Investment Protocol (AIP) is an enlightened multi-national effort to sustainably develop the emerging wealth of the Arctic—and, for the first time in any “new frontier” building effort, to do it in concert with the indigenous residents of the Arctic.

This protocol lifts off on a high trajectory of cooperation with local communities across national boundaries and a long-term view to protect the environment to “help ensure private-sector and other organizations do the right things for the right reasons.”

The New El Dorado

The Arctic has been called the last frontier, the new El Dorado. Estimates vary, but economists estimate that by 2030 from 5 percent to 25 percent of the total world shipping trade could transit the Northern Sea Route and the Northwest Passage. This represents billions of dollars in savings in just moving goods and commodities from one part of the world to markets in another.

Scientists estimate the Arctic holds huge reserves of minerals, metals, and fuels. Extracting these resources and bringing them to market is just beginning. Norway has begun drilling for oil and Russia encourages traffic.

The United States has leased miles of potential oil fields that are active through 2020 off Alaska’s Arctic in the Chukchi Sea. Shell’s continuing interest in protecting its leased assets led the company to appeal the recent Department of the Interior refusal to extend those, and the Beaufort Sea leases, which expire in 2017. By 2050, at the rate the region is becoming more accessible, aquaculture and fisheries could increase by 60 percent to 70 percent.

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Expensive Build-Out

However, building the wherewithal for Arctic nations to take advantage of the probable wealth the thawing Arctic offers will cost in the billions. Guggenheim’s Chief Investment Officer Scott Minerd estimates about a $1 trillion in investment is needed to realize the riches of the Arctic: roads, airports, seaports, fuel dumps, railways, and aids to navigation, plus safeguards for ships in danger and possible oil spills. Governments alone can no longer afford to subsidize the massive kind of infrastructure the Arctic will need to give up its treasures.

To move the potential for public/private partnerships from speculation to reality, former Bethel Mayor Hugh Short launched Pt Capital in 2013. Pt Capital is the only firm in Alaska, or the United States, dedicated to Arctic asset management and development.

By 2015 the firm had raised more than $125 million dedicated to the Arctic Fund.

Public/private partnerships to build infrastructure is still “an innovative concept” according to Short, who says, “Environmental stewardship, local hire, and investment are at the core of Pt Capital. It is so important to both internal stakeholders and investors to build resilient societies.”

Attracting Investment

“This is Alaskans attracting investment to Alaska,” says Pt Capital President and former Alaska Lieutenant Governor Mead Treadwell, speaking of the emerging partnerships between capital investment and Alaska Native Corporations that intend to participate in infrastructure development.

Treadwell is one of the architects of the AIP. He says Pt Capital aims to make “good investments” by investing in Alaska enterprises that support development such as port services companies, fuel distributorships, and barge operations. “Just on an an-

nual basis we have seen a 5.8 percent growth rate in Arctic GDP while the United States has grown by 2 percent,” Treadwell says.

Preventing this rapid growth from degenerating into a free for all has been the goal of the Global Agenda Council of the World Economic Forum, the interdisciplinary and multi-national group that crafted the AIP. They aimed to create a standard for sustainable development for the benefit of not just investors but also the people who live, work, and transit the Arctic, including the various governments, academic, environmental, and business sectors.

While the AIP is voluntary, the recent agreement in Paris at the Climate Conference, also non-binding, may set a precedent.

The eight Arctic nations—Canada, Denmark, Sweden, Norway, Finland, United States, Iceland, and Russia—hope the AIP will make sure the right things are done in the right way.

The six principles comprising AIP:  Build resilient societies through economic development  Respect and include local communities and indigenous people  Pursue measures to protect the environment of the Arctic  Practice responsible and transparent business methods  Consult and integrate science and traditional ecological knowledge  Strengthen pan-Arctic collaboration and sharing of best practices This protocol signifies a new era of responsible growth and human respect. It is intended to create a fiscally transparent scenario that spreads the wealth rather than treat the Arctic and its inhabitants as a Third World region. R Alaskan author J. Pennelope Goforth is home ported in Anchorage.

Alaska Business Monthly | March 2016 www.akbizmag.com

ALASKA NATIVE BUSINESS

Alaska Native Corporations Create Opportunities Investments provide new capital, direct and indirect benefits

By Julie Stricker

R

andy Zimin has spent most of his life in the Bristol Bay area. Growing up in South Naknek, he and his classmates would get up, go to the airport, and hop on a plane every morning for the three-mile commute across the Naknek River to school.

The Miss Rebecca in Bristol Bay. Photo courtesy of ADESCO LLC

“Back then we had about 250 people in our little village,” he says. “Now we’re down to about 35.”

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March 2016 | Alaska Business Monthly

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Both the economy and village population in the Bristol Bay region have been shrinking drastically, he says. His son worked in the salmon fishery for a while, but is now studying dentistry in Arizona. “There’s a great talent pool out in the region, but a lot of the kids are growing up and graduating and leaving and not coming back because there’s not enough opportunities in the Bush.”

Zimin is a general contractor who owns a small fleet of boats that provide transportation and cargo service in the region. ADESCO LLC has been in operation since 2005, starting as a sole proprietorship with a subcontract to paint outhouses for the National Park Service in Katmai National Park. Over the years, Zimin has expanded, completing projects across the Lower 48 and Central America but focusing on western Alaska, hiring local workers whenever possible.

New Capital Program

In 2014, Zimin was looking to buy an eightyfoot shallow draft landing craft, the Miss Rebecca, to use as a fish tender, when he heard of a capital investment program getting underway through the Bristol Bay Native Corporation (BBNC).

The Bristol Bay Development Fund (BBDF) was launched in 2014 with the aim of funding startups and small businesses in the Bristol Bay

region, says fund manager Cameron Poindexter. It has $5 million to invest over four years.

Zimin’s company was its first investment.

“Our capital provided them the ability to approach traditional financing—a bank— and complete the purchase,” Poindexter says. “That helped grow their marine fleet.”

“I think I was probably like the guinea pig of the program,” Zimin says. “They invested in my company, which helped me to purchase a vessel and the gear to make it a tender for the 2015 salmon season.”

Zimin says this year he was able to buy a marina from Trident Seafood and is looking at additional expansion.

“We’ve actually grown quite a bit in the past two years,” he says. “In fact, we just bought two barges that kind of came along with the marina, so we’re expanding fairly quickly, and BBDF has been there to help us along. We hope that continues. We’re really glad to see they’re reaching out to smaller companies that could use a foot up. It’s been really good for us, too.”

That result is exactly what BBNC was looking for when it set up the fund, Poindexter says. The corporation, one of twelve Alaskabased regional corporations created under the 1971 ANCSA (Alaska Native Claims Settlement Act), is one of the largest Alaska-owned companies with $1.7 billion in total revenue in

fiscal year 2014. Most of its revenues are generated through its investment portfolio, natural resources, and a host of subsidiaries.

Under ANCSA, the corporation has dual mandates: to make a profit and to invest in the social, educational, and cultural wellbeing of its shareholders. One way BBNC is looking to fulfill the second part of the mandate is by acquiring or investing in Alaska or regional businesses to create opportunities for its ten thousand shareholders, most of whom are under the age of forty.

A ‘Nurture’ Fund

In 2011, the corporation announced plans to invest 10 percent of its assets directly within the Bristol Bay region, Poindexter says.

BBNC bought the Mission Lodge, a fly-out fishing retreat, but further efforts stalled.

The executive team met again and came up with the development fund.

Poindexter is the fund manager and John Wanamaker is the venture partner. The fund offers both financial and nonfinancial capital and is considered a “nurture” capital fund.

Over the years, many people had approached BBNC with business ideas, but the corporation didn’t have a mechanism in place to help them, Poindexter says. One problem for potential businesses in rural Alaska is a lack of traditional banking institutions.

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“Unless you have a solid operating history, it’s highly unlikely you’re going to be able to get a loan to get your business started,” he says. “In places like Anchorage, there’s sometimes help available from family or friends.

That doesn’t exist as much in Bristol Bay. We saw a gap in funding needs out there.”

Poindexter notes the development fund not only helps finance businesses but also aids with planning, coaching, advice, and industry connections.

To date, the fund has made investments in three businesses, including another company looking to add fish tender capabilities to a vessel, but has several other opportunities in the pipeline.

Direct and Indirect Benefits

In addition to the investment fund, BBNC has been pursuing other acquisitions in the region that will directly benefit its more than ten thousand shareholders.

In July, the corporation completed its acquisition of a fuels network based in Dillingham.

Bristol Alliance Fuels operates a 2.95-milliongallon tank farm and marine fueling facility, as well as a retail gas station and convenience store. The business provides regular and diesel fuel, aviation and jet fuel, and propane to commercial and retail customers in the region.

It also provides docking, storage, and barge haul-out services. Bristol Alliance

Fuels employs twenty people.

“This acquisition aligns with our in-region investment strategy, and the business fits into BBNC’s existing petroleum distribution line of business,” says BBNC President and CEO Jason Metrokin in a news release. “We look forward to the opportunities this investment will bring to Bristol Bay and BBNC shareholders.”

Other Alaska Native corporations are also investing in Alaska-based businesses to provide direct and indirect benefits for shareholders. The Arctic Slope Regional Corporation’s (ASRC) investment in a major Arctic subsea fiber-optic project, Bering Straits Na-

‘Brand New Industry’

The most recent investment is going to Belleque Family Farm. Kyle and Johanna Belleque have been farming in the Dillingham area for three years, successfully growing potatoes, broccoli, peas, brussels sprouts, and cabbage, but only during the region’s abbreviated summer season. The aid from BBDF will allow the Belleques to grow vegetables in a forty-foot shipping container using hydroponics, says Kyle Belleque.

“Dillingham is blessed with excellent soils, and we have a number of very successful gardeners in the region and some small-scale farms,” Belleque says. “We do have some fresh produce for a few months of the year. What we don’t have is fresh produce year-round.”

Most produce in Alaska is shipped from California and Mexico. Many of the vegetables are picked before full maturity so they can withstand the long journey, but much of it spoils before reaching stores. Belleque says his container garden will allow him to cut delivery times and provide higher-quality products.

The garden is being constructed by Vertical Harvest Hydroponics in Anchorage and will be shipped to Dillingham this spring on the first barge. Belleque hopes to harvest his first crops by June.

“It’s a brand new type of industry for the region,” Poindexter says. “We’re hoping that it proves successful for the region and it has great growth potential.”

Businesses seeking help from BBDF don’t have to be shareholders of BBNC. Poindexter says he’s open to any investment as long as it benefits BBNC shareholders, whether it’s direct ownership, provides jobs, improves the lifestyles of people in the region, or provides a financial return for shareholders.

“There’s lots of different ways we believe investments can be beneficial,” he says. “If we’re unable to make an investment, people are still able to access myself and our network of resources to be able to plan their business or to get coaching or connections that would be valuable to them.” www.akbizmag.com

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tive Corporation’s (BSNC) acquisition of Alaska Industrial Hardware (AIH), and Chugach Alaska Corporation’s partnership with All American Oilfield Associates are just some examples of how the regional corporations are investing in their home state.

High-Speed Internet

ASRC’s investment gives the corporation a minority interest in Anchorage-based Quintillion Holdings LLC, which is building a high-speed telecommunications network on the North Slope, the Quintillion Subsea Cable Project. It is a subset of Canada-based Arctic Fibre, which seeks to link Europe and Asia via a nine-thousand-milelong, high-speed fiber-optic subsea cable via the Northwest Passage. The cable would be shorter and provide faster data delivery than current routes that cross the Lower 48.

Quintillion plans to construct spurs to Prudhoe Bay, Barrow, Wainwright, Kotzebue, and Nome that will bring high-speed Internet access to northern and western Alaska for the first time, as well as branching off with a high-speed connection between Deadhorse and Fairbanks. “It has enormous potential,” says ASRC spokesman Ty Hardt.

Bringing high-speed Internet to the North Slope will provide many opportunities North Slope residents.

“The Quintillion Subsea Cable Project will set the stage for an economic future that will attract and retain residents, generate new businesses, provide distance learning and telemedicine opportunities, develop support industries for oil and gas exploration and development, and provide for a telecommunications infrastructure tying Alaska’s North Slope into the global marketplace,” according to ASRC. For example, Barrow’s Ilisagvik College, the only tribal community college in the state, can’t use many of the distance-learning apps on the Internet because it lacks a high-speed connection.

The new line is also expected to reduce the cost of Internet access. The region is currently served by antiquated and expensive satellite and microwave systems.

According to ASRC, “a recent study of the latest satellite technology determined the capital cost per 1 Gbps [gigabits per second] of capacity is $1.5 million, while the capital cost of 1 Gbps to Arctic Alaska on fiber-optic cable is $10,000.”

In Barrow, residents currently pay $35.84 per megabyte for a 6 Mbps (megabits per second) connection. In Kansas City, Missouri, residents pay 7 cents per megabyte for a 1,000 Mbps connection. The Quintillion project will help bring North Slope residents more in line with Lower 48 norms for Internet access.

Solid Investment

BSNC’s 2015 acquisition of AIH isn’t likely to have as large an impact on shareholders, but it’s a solid investment in line with the corporation’s goals, BSNC President and CEO Gail Schubert says in a news release.

“Over the past year we evaluated the possibilities and benefits presented by this acquisition,” she says. “We determined that AIH is a solid company that fits well with the growing Bering Straits portfolio of companies and will continue to thrive.”

AIH was started in 1959 in Anchorage and operates three stores in that city, as well as locations in Eagle River, Fairbanks, Juneau, Kenai, and Wasilla. It sells high-quality equipment, tools, industrial materials, maintenance supplies, and safety products geared to all aspects of Alaska industry.

The purchase helps diversify BSNC’s source of revenues and profits, which are weighted heavily toward government service contracts.

That is part of the company’s strategic plan, says spokeswoman Miriam Aarons.

“Our board established a strategic plan to diversify its holdings with more operating companies than contracting,” she says.

“Additionally, the acquisition is complementary to BSNC’s other lines of work in government contracting,” Aarons adds in an email. “Base Operations Support Services is

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one of BSNC’s primary business lines. By combining efforts with a hardware and materials supplier, BSNC can offer the best possible pricing on both commercial and federal contracts.”

BSNC isn’t planning any major changes, noting AIH’s executive management team already performs well and it has a loyal, long-standing employee base. In the future, however, if a location is identified with a good customer base and volume that could support a profitable store, the corporation would consider building a new store.

“We do have a discount for shareholders, which is the lowest available price for anyone,” Aarons says.

Backing and Resources

Early in 2015, Chugach Alaska acquired a substantial portion of All American Oilfield Associates LLC and subsidiary All American Oilfield Equipment. The company is headquartered in Kenai and provides oil and gas services in Cook Inlet and other Alaska locations.

“All American possesses an expertise in the oil and gas industry and already has a solid business model and customer base— all of which will strengthen Chugach’s position in the dynamic Alaska oil and gas market,” says Chugach CEO Gabriel Kompkoff.

Chugach Alaska uses a “great owner” approach to company ownership, allowing All

www.akbizmag.com

American to operate as it has in the past, but with the backing and resources of the larger corporation to support operations.

All American was created in 2010 by Pete and Tanya Dickinson. In a statement, Pete Dickinson notes the backing of Chugach Alaska’s “significant corporate resources and support” will allow the company to grow and strengthen its core businesses in the state.

Expansion Plans

Back in Naknek, Randy Zimin is already making plans to expand his vessel and marina operations. Reached by telephone in early January, Zimin was in Florida looking at another boat that might fit into his operations.

This one would be able to work year-round and employ another four to six people.

The development fund’s investment, which allowed him to add tender equipment to the Miss Rebecca, freed up the money for Zimin to buy the marina. The Miss Rebecca is a utilitytype vessel that can also tow barges and carry freight to regional villages when the salmon aren’t running. Zimin was able to hire an additional eight to ten local workers for marina operations “which is huge,” he says.

His business was recently certified by the Small Business Administration under its 8(a) rules for minority and disadvantaged businesses, which Zimin hopes will

bring more opportunities his way. Zimin offers general contracting, marine transportation, marina and storage services, fish tending, and security services.

“We’re an all-around company,’ he says.

“I’ve gone all over with the company. We don’t have that big of an economy in Bristol Bay to actually stay in place and do one thing. I think with the marina and the boats and construction and whatnot, we’ll stay really busy.”

He’s hoping to be able to create jobs that will keep people who want to stay in the region and help grow the village. “It’s not yearround jobs, but it will definitely help keep the economy of that little village alive,” he says.

BBFD’s initial investment has snowballed. The initial investment into the fish tender operations allowed Zimin to buy the marina and expand into marine repair and logistics and to expand his fleet. That provides more opportunities.

“It opens up the door for other entrepreneurs who want to do maintenance on vessels to come on down and work,” he says.

“It opens the doors for a lot more business to come in to our region.”

R Julie Stricker is a journalist living near Fairbanks.

March 2016 | Alaska Business Monthly

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ECONOMIC DEVELOPMENT

Regional Investments in Bristol Bay and the Aleutians Funders help create local jobs and meet community needs

S

ome rural Alaska businesses are getting a leg up from targeted investment efforts. Bristol Bay Native Corporation (BBNC) is one of several companies choosing to invest in rural businesses.

For the Alaska Native regional corporation, investing in local endeavors is something of a no-brainer. The corporation set up as Bristol Bay Development Fund (BBDF), a wholly-owned subsidiary, in the fall of 2014.

For the first round of investments, the company wants to dedicate $5 million to Bristol Bay businesses. That’s part of a larger effort

by BBNC to invest in the region where it’s rooted—a few years ago, the company announced plans to invest about 10 percent of its assets, or $30 million, in the region.

By early 2015, the development fund had invested in four businesses, committing a total of $675,000 to them. The fund started its investment efforts at the heart of the Bristol Bay economy: the fishery.

‘Being Local’

South Naknek resident Randy Zimin received one of BBDF’s first investments. Zimin, who owns ADESCO LLC, is a long-time contractor in the area. In 2014, he bought a vessel from another local business with an eye toward tendering in the sockeye fishery.

Bristol Bay’s fishery is dependent on thousands of fishermen who catch sockeye and other salmon and processors who get those fish to market. Connecting the two groups are tenders stationed in each of the five fishing districts. Those larger boats are where the Bristol Bay fleet offloads fish, refuels, and can get ice, water, and other supplies. Many of those tenders come from other parts of the state on contract with the major processing companies.

Zimin wants to see a whole fleet of locally-owned and operated tenders.

“Hopefully we can get some more tenders in the area because it saves the fishermen money and the canneries money, or the processors, because they don’t have to pay the fuel and crew all the way from Seattle or Dutch Harbor or Kodiak,” Zimin says. “And the bottom line is the money probably comes from fishermen, and if we 98

Photo courtesy of ADESCO LLC

By Molly Dischner

The Miss Rebecca has a long history in Bristol Bay as the Twilight.

can save the processors any money at all by being local, it’s definitely going to help.”

Zimin says when he heard about the BBDF, he saw it as a way to grow his business and benefit the corporation at the same time.

He purchased his first tender, the Miley Jean, for the 2014 season. That boat was out for upgrades in 2015, including a conversion from an ice-tote system to a refrigeration system that will result in higher quality fish storage. That’s being funded in part by a loan from BBNC and BBDF. With his main BBDF investment he purchased a second boat to keep his tender operation going for the 2015 summer and plans to start launching his fleet this summer. That was the Miss Rebecca, formerly known as the Twilight, a boat with a long history in Bristol Bay. She was built in Dillingham and has worked in the bay for years, Zimin says. Last summer, ADESCO used her to tender for Alaska General Seafoods. She worked in both the Nushagak and the Naknek districts.

“We almost put in a million pounds of fish for the company,” Zimin says. “Beyond that we sold fuel to the fishermen and groceries, so between service and tendering we did really well.”

This summer, Zimin says, he hopes to have both boats tendering, probably on the eastside of the Bay. When she’s not tendering, Zimin plans to use the Miss Rebecca for moving cargo

to smaller communities, such as Igiugig, Levelock, and Port Heiden, in conjunction with larger freight companies.

“The boat is a tug pushboat and landing craft, and we just hope to provide a good service at a little less rate for the people,” he says.

“I know it’s getting harder in the villages to make ends meet, so we’re hoping to help in that way.”

Zimin wants to hire a mostly-local workforce for his tender and tug endeavors and says the investment allows him to give more Bristol Bay residents a job. In his first season of tendering on the Miss Rebecca, Zimin says he had about 75 percent BBNC shareholder hire.

He hired four employees total on the boat.

“We had a fun summer, we made some money, and we had a great crew,” Zimin says.

“Two … were based out of Iliamna and Levelock area, super crew. I can’t even say anything more than that. They did a great job …

I hope they’ll be back.”

‘Easy to Work With’

From his first several months of working with BBDF, Zimin says he’d recommend the program to other local businesses.

“They’ve been really easy to work with,” Zimin says. “I got an SBA [Small Business Association] loan, and they helped me through that when we purchased the boat, and they helped of course with other parts of getting the boat ready and down payments and what

Alaska Business Monthly | March 2016 www.akbizmag.com

“In my family, we have ivory carvers, basket weavers and many other artists. My father taught me how to draw, and it’s a craft I’m handing down to my own daughter. All of us in Bristol Bay who create art were looking for a way to bring it to the world, and now BBNC has created a website where we can sell our Native art, at www.AlaskaNative.Life .”

—Apayo Moore, BBNC shareholder and professional artist, Aleknagik, AK

Creating something that will always be, in a place that’s always been.

not. It worked out really well. I would definitely recommend the program to others.”

Zimin wants to see a whole fleet of local tenders in Bristol Bay, and in fact another early BBDF investment in 2015 did go to another Bristol Bay business active in the fishery.

But BBDF is about far more than just fishing businesses.

Fund Manager Cameron Poindexter says BBDF is focused on businesses in several fields: fisheries, transportation, agriculture, energy, technology, and health and wellness. New or existing businesses can apply for between $20,000 and $500,000. BBDF invests in a business by providing capital in exchange for partial ownership, with a plan to exit after a certain duration, either by selling the share back to the owner or looking for someone else to buy it.

BBDF is mostly looking to invest in Bristol Bay businesses, but those that will benefit the region are eligible even if they aren’t entirely based there.

Filling Community Needs

In early 2016, the fund announced its most recent investment in an entirely different business: Belleque Family Farm, an agricultural endeavor.

Johanna Belleque, a BBNC shareholder, and husband Kyle Belleque have operated a farm in Dillingham for the past few years, but are limited by a short growing season.

BBDF’s investment will allow them to use a forty-foot shipping container to grow fresh produce hydroponically all year round.

The system will come from Anchorage’s Vertical Harvest Hydroponics and be shipped to Dillingham by barge in spring. The container is expected to grow about 450 pieces of produce per week year-round. That will be sold to local restaurants, lodges, and others.

Although BBDF is eager to invest in businesses, Poindexter says the fund is careful to work with business owners to ensure that each investment will help the region and the business.

Zimin says the effort to keep businesses in the region resonates with him.

“If we can support [local business] it’s going to keep the money here, and keep it from leaving, and that’s probably the most important thing in any region … keeping that money as local as you can, keep people working, keep your population base from leaving.”

The businesses must seek to fill a need in the community, and the individuals behind them have to have some knowledge of the industry. That means a commercial fisherman trying to open an ice cream stand might not have an easy time getting funding, Poindexter says. But a fisherman who wants to launch a fishing-related business?

More likely to have an investment.

100

As part of the application process, each hopeful business must come up with a business plan. Poindexter says one of the main criteria he looks for in an applicant is someone with experience in the industry they want to enter, or knowledge of it.

He and the fund also provide help with business plans and connect business owners to other resources to give them a higher likelihood of success.

Business Plan Competitions

BBNC isn’t alone in trying to kick start rural Alaska businesses.

Out west, the Aleutian Pribilof Island Community Development Association and the Aleut Corporation have a competitionstyle business investment endeavor.

The Aleutian Marketplace encourages residents of twelve communities—Adak, Akutan, Atka, Cold Bay, King Cove, Nikolski, False Pass, Nelson Lagoon, Sand Point, St. George, St. Paul, and Unalaska—to come up with a business plan.

This year, the winner of the competition will receive $20,000 to start a business in at least one of those communities.

While BBDF judges each potential business on its own and has multiple applications at various stages of the process at any given time, the Aleutian Marketplace is an effort to use competition to produce the strongest businesses. Applications are due in early March, and three finalists will present their plans in April to a panel of judges in Anchorage, with the winning selection chosen after that.

The presentations will be judged on six criteria: marketing strategy, long-term economic sustainability, financial viability, business capacity, business case, and the overall business plan design and implementation.

This is the third time the partnering companies have offered the Aleutian Marketplace competition. Previous renditions had a lower prize, as well as less detailed information required from applicants.

Past winning ideas included a hydroponic greenhouse, a safer knife sheath, and several food-related ideas: a plan to make hot dogs from pollock in the region, an Aleutian burger made from local seafood, and baked goods with local ingredients.

Back in the Bristol Bay region, a similar competition-style endeavor has helped many local businesses.

The Foraker Group orchestrated a business plan competition that was funded by Anglo-American, a former partner in the Pebble Project. Through that effort, nine new and growing businesses received a combined $1.8 million in 2015.

That endeavor was targeted at businesses on the eastern side of Bristol Bay and in the Iliamna Lake area. Everyone was eligible

to participate, including existing for-profit and nonprofit groups and Tribes. Foraker Group President and CEO Laurie Wolf says the competition was intended in part to create new jobs in the region.

“The funder asked us to engage in a business plan competition to get people excited in the communities around new ways to expand job creation, and so we had communities, we had one-on-one meetings, we did a lot of effort to engage lots of folks,” she says.

According to past Lake and Peninsula Borough discussion of the program, AngloAmerican provided funding for the competition when it decided to leave the Pebble Partnership.

Based on the business plans submitted, a total of about one hundred jobs should be created in ten years. That was one of the criteria for judging in the competition. The new jobs are in a range of industries, including fish processing, agriculture, fisheries support businesses, and even other development endeavors, like construction and gravel supply.

The competition took participants through the process of developing a business plan, starting with a one-page summary submitted in early 2015 and ending with the competition that wrapped up toward the end of the year.

“The journey started out very broad and there was a number of steps all the way through the competition,” Wolf says.

The businesses that were funded include Zimin’s ADESCO LLC and another South Naknek-based business called Diamond O Fish House. In Naknek, Bristol Bay Bailer, Jodie’s Ideas, Maritime Industries, and Naknek Family Fisheries all received funding.

Other recipients include Diamond Point LLC in Igiugig, Farm Lodge, Inc. at Lake Clark, and Iliamna Development Corporation.

Wolf says all of the businesses were required to have other sources of funding as well.

“Our funds are meant to be leverage dollars, so none of our funds are fully funding the projects,” Wolf says.

Those competition-style business investment programs have gained popularity in Alaska in recent years. Another occurs in Southeast Alaska, the Interior has one, and the Anchorage Economic Development Corporation also organizes one.

Ultimately, part of the idea is to have businesses striving for their best and showing that they can compete in one area before receiving funding to help launch their endeavor. The skills needed for the competition can mimic some of the skills needed in the business world.

R Freelancer Molly Dischner writes from Dillingham.

Alaska Business Monthly | March 2016 www.akbizmag.com

REAL ESTATE

Industrial and Commercial Warehouse and Storage Space in Alaska A quick look at markets in Kenai, Fairbanks, and Anchorage

By Chad Graham Kenai

When people mention Kenai real estate, most times they are referring to about a twenty-mile radius that includes Kenai, Soldotna, Kalifornsky Beach, and North Kenai by Nikiski, according to Fred Braun who works for Jack White Real Estate in the area. There have been major projects in the areas and this has been a significant driver for the industrial real estate market in the last few years. Out of approximately thirtyfive warehouses, it seems there are only about two that are available for lease.

Many of the companies that have leased these properties have signed three to five year contracts and are renewing them. In the Nikiski area, more liquefied natural gas (LNG) refinery operations are slated if permits are approved. More than 151 parcels have already been purchased for LNG endeavors. If these projects go through, there will be a boom and a need for commercial leases or purchases to meet the needs.

Fairbanks

After speaking with Pamela Troop at Alaska Commercial Properties in Fairbanks, it appears that there is excess inventory of warehouses per capita. Nothing new has been built in years, and properties are slow moving. Location is important, and when industrial listings are not on the main thoroughfare they are more difficult to lease or sell.

The largest warehouses tend to stay vacant longer because of their size. If they are too large, there is a limited interest. At this time, there are approximately four warehouses available ranging from eight thouwww.akbizmag.com

sand to forty thousand square feet. Most buyers sign a lease for up to ten years, so that is another element that limits availability of choices in the Fairbanks area.

It is a small community with specific needs and the market has slowed down.

According to Troop, it is anticipated that it will become even slower with the state’s economy. At press time there is an excess of more than 1 million square feet in commercial properties in the area, including warehouses, and some properties take up to two years to sell. There may be US Air Force projects approved in the next few years, however, that could bring about more opportunities for growth.

Anchorage

The industrial vacancy rate at the end of 2014 in Anchorage was 2.4 percent, and it increased to 2.1 percent by the end of the first quarter in 2015. Warehouse projects were at a rate of 2.0 percent at the end of the first quarter in 2015.

Of the past few years, 2015 brought about the largest lease signings. Subleased space vacancy increased to 24,265 square feet at the end of the first quarter of 2015. Flex projects (warehouse/office/retail) reported 1,600 square feet of vacant sublease space at the end of the first quarter of 2015. Also at the end of the first quarter in 2015, warehouse projects reported 22,665 square feet of vacant sublease space.

Rental rates for available industrial space were quoted as $13.60 per square foot, triple net per square foot per year at the end of the fourth quarter of 2015, which

was a 4.7 percent decrease from the end of the third quarter of 2015. The Flex rates at the end of the third quarter were $17.88 per square foot, with warehouse rates at $12.96.

No new industrial space was completed or under construction in the Anchorage market area during the fourth quarter of 2015. The industrial inventory amounted to 16,325,467 square feet in 838 buildings.

The Flex sector had 2,673,919 square feet with 139 projects. The warehouse sector had 13,651,548 square feet and 699 buildings. R Chad Graham, Owner of Graham Commercial Real Estate Consultants, has been a commercial real estate agent since 2000. His experiences have given him extensive knowledge of the commercial sector including leasing strategy, tenant retention, current pricing for sales and leasing, and foresight into upcoming market trends. He has over a decade of experience with leasing and managing commercial spaces including retail, office, and industrial. He is a member of the National Association of REALTORS, exclusive member of the Top 40 under 40, ICSC (International Council of Shopping Centers), CCIM (Certified Commercial Investment Member), member of BOMA, and the IREM (Institute of Real Estate Management). Contact him at 907-727-5001 or chad@chadgraham.net.

March 2016 | Alaska Business Monthly

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TRANSPORTATION

Port of Anchorage and Port MacKenzie Work Together Proximity promotes reciprocal economic development

Fuel comes and goes through the Port of Anchorage.

Courtesy of POA

By J. Pennelope Goforth

T

he Port of Anchorage and Port MacKenzie are both located on the upper end of the Knik Arm of Cook Inlet. Anchorage is located on the east shore, MacKenzie on the west. Other than sharing the same body of water, the two ports seemingly have little in common. One does a tremendous volume of business today, the other hopes to be doing the same tomorrow. MacKenzie is still building infrastructure, Anchorage is intermodal with rail, trucking, and airport access. MacKenzie has a little over 9,000 acres of “uplands” while Anchorage has about 130 acres of industrial parklands.

For existing a mere mile and a half as the gull flies across Knik Arm, the two ports couldn’t be more different. Yet from a busi-

ness perspective, their very proximity promotes reciprocal economic development. The two ports intersect at one critical point: combining their relative strong points. As the Port of Anchorage’s Port Director Stephen Ribuffo put it, the two ports should not be in competition. “If you sensibly carve up the kingdom and play to strengths: Anchorage imports and MacKenzie exports,” he says.

Location Matters

Don’t confuse Point MacKenzie with Port MacKenzie, both located in the MatanuskaSusitna Borough. A brief look at the nautical chart will tell you why: the ubiquitous mudflats that form the primary coastal feature of the shores of Cook Inlet create a wide apron of shallows around the point punctuated by rocky outcrops. Port MacKenzie—construc-

A Little Port Whine: Port of Anchorage not first major port

By J. Pennelope Goforth

I

ronically, the first major “port” in Knik Arm was not Ship Creek in Anchorage, but the old village of Knik a few miles north of the current Port Mackenzie. The Russians established a mission opposite the inlet from modern Anchorage in 1835, but little development occurred until the discovery of gold in the late nineteenth century. Most of the commercial activity centered at Knik—the crossroads of trails from the Interior to Southcentral Alaska.

“Knik was an essential re-supply stop for prospectors traveling overland to the Willow Creek, Susitna, Yentna, Chulitna, McKinley, Gold Creek, Flat, and Iditarod gold strike areas. It provided essential goods such as boots, shoes, rain gear, guns, ammunition, hardware, furs, groceries, coffee, tobacco, dried fish for dog teams, oats and hay for horses, and mail from home,” writes Knik historian Colleen Mielke.

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Here the Alaska Commercial Company established a trading post to supply the miners; goods were lightered in from ships anchored in the Knik Arm roadstead. A post office opened in 1904 and by 1914 the population of five hundred made Knik the largest community in Cook Inlet, all centered along the wharves and docks built along Knik Arm. A small boom town, Knik was a major point on the Iditarod Trail, opened in 1911, with saloons, hotels, stores, cafes, and churches. But the location was right on the mud flats and eventually the erosion by tides and ice floes became too costly to sustain. With the railroad headquarters growing at Ship Creek Landing, gradually the residents moved to that side of Knik Arm, abandoning the area.

The Port of Anchorage intentionally grew into its role as the pre-eminent maritime facility in the state. When air transportation and the US military became more important between the 1930s and 1950s, both port and

city boomed. In 1930, Merrill Field opened.

The 1940s saw the construction of the military installations of Elmendorf Air Force Base and Fort Richardson, both of which utilized the port. Then in 1951, Anchorage International Airport opened. In March 1964, a magnitude 9.2 earthquake struck the state, knocking out the ports of Valdez, Seward, and Kodiak—leaving the Port of Anchorage with relatively little damage and the ability to supply the entire stricken region. When oil was discovered in Prudhoe Bay in 1968, the oil boom created greater growth for the Port of Anchorage. The North Slope relied on materials coming through the port first to build the Haul Road and then to build the trans-Alaska oil pipeline. Following a brief but calamitous economic recession in the 1980s, the city and the port continued to grow into the 1990s with capital building projects, housing development, and the increasing expansion of Ted Stevens Anchorage International Airport.

R

Alaska Business Monthly | March 2016 www.akbizmag.com

tion of which began in late 1999—is situated at the optimal position several miles northeast of the point along the west shore of Knik Arm where the coast drops off sharply. Here there is sixty-five feet of water off the dock, making it a deep draft port naturally. Another good reason to locate in that spot, explains Port Director Marc Van Dongen, is the swift current that scours any buildup of silt brought downstream by the rivers that feed into the inlet.

Economically that is a huge boon since the port doesn’t need to be dredged on a regular basis to ensure ship traffic. “This saves millions of dollars annually,” he says.

While MacKenzie was built by design on the best spot for shipping, Anchorage was built at the mouth of Ship Creek to accommodate the building of the railroad in 1915.

Even in the early days of the port, when it was called Ship Creek Landing, most vessels anchored out a half a mile or more from the mouth of the creek. Cargo and passengers were ferried by shallow draft “lighters” from the larger ships to the shore. Early piers were built using piling driven deeply into the mud for smaller craft to tie up to.

Today the Port of Anchorage has about thirty-five feet of clearance at mean low tide for the tankers and cargo container ships that dock there. The area has to be dredged every year by the US Army Corps of Engineers.

Still both ports do depend on the dredging of the shipping channel to Knik Arm as the treacherous currents cause constant shoaling that changes “the depth radically from year to year,” according to a US Coast Pilot, which ships use to navigate the channel.

Ships are required to have Alaska ship pilots to guide them through the changing seascape beneath the waters of Cook Inlet. Both ports also have to cope with a semi-diurnal forty-one-foot tidal range, second in North America only to the famous Bay of Fundy tidal range on the East Coast of Canada. This tidal range is also responsible for keeping the lower Knik Arm from being locked up by ice in winter. The changing tide breaks up the ice into a sea of mini icebergs called ice pans instead of a solid thick sheet of ice.

Because of its proximity, the port contributed to the growth of Anchorage as it developed into the largest city in the state, far beyond the tent city that sprang up to build the railroad.

The Port of Anchorage has been developing infrastructure almost organically for the past one hundred years: the railroad needed the port to build itself, the city needed roads to the port to get supplies like lumber and cement to grow; and the airport needed pipes to carry jet fuel to expand into one of the busiest airports in the world. In 2006, the completion of road and rail extensions improved cargo flow and introduced intermodal capacity. In contrast, MacKenzie was eleven miles from the nearest www.akbizmag.com

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Port of Anchorage Tenants

SOURCE: Port of Anchorage

T

he Port of Anchorage, via its major stakeholders, serves business and communities throughout the State of Alaska. The stakeholders are listed below:  Port of Anchorage portofalaska.com  TOTE Maritime Alaska totemaritime.com  Matson, Inc. matson.com

 Tesoro tsocorp.com  Crowley crowley.com  Aircraft Services International Group (ASIG) asig.com  Flint Hills Resources fhr.com  Alaska Basic Industries anchsand.com  Delta Western deltawestern.com

utility. A road had to be built to the port to connect it with the Point MacKenzie Road that in turn connects with the Knik-Goose Bay Road and the Parks Highway. The nearest city thirtyeight miles away by road is Wasilla, population 8,850. By boat, the nearest city to Port Mac­ Kenzie is Anchorage, population around three hundred thousand, less than two miles away.

A Matter of Intention

Despite the seemingly odd choice of location from the shoreside perspective, Port MacKenzie was situated by deliberate design according to Van Dongen. “I was hired in 1999 to build a port to export natural resources,” he says.

He looks to the future. Once the roads and railroad loop are in place Port MacKenzie is a relative stone’s throw from billions of dollars of mineral resources. As early as 1973 a deep water port facility was presented to a joint MatSu Borough/Anchorage City Council meeting proposing the idea of a regional port authority that would also build and manage a port at Point MacKenzie. The aim was to develop the new port as an export facility that would primarily “open mining areas in the Mat-Su Borough for development,” as well as provide additional cargo container service. “Sand, gravel, coal, copper, lead, zinc, limestone, wood chips; all these commodities are more suited to be moved out of Port MacKenzie,” says Van Dongen, expanding on the earlier ongoing plans for the port. Rapid economical movement of these resources is available with the five-foot wide conveyor system capable of moving up to two thousand tons of commodities per hour from the bluff a half-mile from the dock directly to the ships’ bunkers. With the deeper draft facility, “MacKenzie can accommodate Panamax sized and even the super-sized, Cape class vessels,” he says. This is critical from a business perspective as the vessels arrive in ballast (that is empty of value cargo) and fill up with raw resources. With one voyage not generating revenue, the return voyage is made profitable only by the large volume of paying product.

Current Commercial Activity

The activities at the Port of Anchorage are so important to the economy that the Anchorage Economic Development Corporation includes it as one of eight key indicators in the “2015 3-Year Economic Outlook.”

The Port of Anchorage serves most of Alaska from Homer at the southern tip of the Kenai Peninsula to the North Slope above the Arctic Circle via rail, road, and air. The US Department of Defense designated it one of twenty-three National Strategic Ports, underscoring proximity to Russia and Asia. All of the jet fuel for Joint Base Elmendorf–Richardson and most of the jet fuel for Ted Stevens Anchorage International Airport comes through the port. A new petroleum product—metha104

Alaska Business Monthly | March 2016 www.akbizmag.com

nol—now comes through the port with the addition of Delta Western as a new tenant at the port facility. As the population of Anchorage (and Alaska along the Railbelt) continues to inch up, general consumer cargo deliveries at the port increase proportionately.

Ribuffo says, “2015 was a big year for the port, with overall increases in activity in the deliveries of general cargo, petroleum products, and cement totaling about thirteen to fifteen percent.” Petroleum products led the increase. “The closure of Flint Hills refinery has meant an increase in shipments of fuel across the dock,” he says.

Delta Western is also set to keep that volume up by bringing in methanol—used by North Slope rigs. Overall petroleum product volumes—jet fuel, unleaded gasoline, Avgas, heating oil, and low sulphur diesel—increased by 30 percent over 2014. Fuel comes to the port via tankers and fuel barges where it is distributed through pipelines—to the airport and the military installation at Joint Base Elmendorf-Richardson—and by truck to other Southcentral communities.

Some of it is stored for seasonal barge shipments to other Alaska ports, harbors, and docks. Cargo containers delivered nearly 2 million tons of consumer commodities—food, clothing, construction materials, vehicles, etc.—in 2014. “One of our stakeholders, Alaska Basic Industries, has tripled their storage capacity,” says Ribuffo, referring to the basic building material that accounts for a few of the percentage points in the port’s increased activity for 2015.

Ribuffo says he anticipates “no new hot trends in 2016, but business will remain steady.” Cruise ship traffic will stay the same at nine port calls from the Holland America line MAASDAM. “We’ll be having our first overnighter in August which should be interesting.” Generally, the behemoth cruise ships are only in port a few hours, but this voyage has been chartered by a company that plans to stage excursions out of the port on this one summer cruise.

The port continues its ongoing modernization project to replace dangerously aging facilities and to accommodate larger barges and vessels at the docks. The port contains about fifty-five acres for storage and staging offloaded cargo. “On Tuesdays when the TOTE container ships call at the port all of that space is filled with full containers. The next day it’s all moved out and begins filling up with empty containers from the truckers to be loaded onto the next ship,” Ribuffo explains.

Across Knik Arm construction has been proceeding full steam ahead at Port Mac­ Kenzie despite the record port calls of thirty-three vessels this past summer. Building the barge dock began in 1999 and was completed in 2003, followed by the deep-draft www.akbizmag.com

A tanker at the Port of Anchorage.

Courtesy of POA

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dock construction finished in 2005, and topped off with the terminal building in 2009. Offshore support vessels (OSV) made up a large portion of the traffic at MacKenzie. “Sixteen miles of concrete coated pipe came in for the Nikiski pipeline,” Van Dongen says. “We stored it over the winter and we loaded it on OSVs, which hauled it down the Inlet for a new pipeline from Furie’s Kitchen Lights natural gas platform to Nikiski.”

While that was happening, the port also utilized its barge dock to offload ten barges of general cargo and heavy construction equipment. “We improved the one-mile road inside the port, Lu Young Lane, from twenty-two feet to thirty-four feet in width to accommodate two-way traffic for tractor trailers hauling cement, fuel, and coal.” The main corridor, Don Young Road, was also paved last year. In one of the most frugal construction moves of last year, Van Dongen says they spent two months installing equipment on the steel pilings of the docks to extend the life of the piles. “Electricity provides cathodic protection to the steel pilings that slows the rate of corrosion,” he explains.

In Van Dongen’s eyes the most important improvement is the rail extension and loop from the main line at Houston to just above the MacKenzie docks. The most efficient

mode, according to Van Dongen, is a single rail with sidings that leads to a mile-long loop where rail cars would discharge their cargo as the train moves around the loop to reconnect with the main Alaska Rail Road tracks.

“This opens up the port to the potential for exporting millions of tons of valuable resources across Alaska and, in the future, connecting with Canadian rail to markets in the Lower 48. “With an efficient rail line and loop to export resources we’ll see a dramatic increase in export tonnage at Port MacKenzie,” Van Dongen says. That’s also a recipe for larger ships, faster turn-arounds, and higher revenues.

Hands Across the Waters

Despite the seemingly opposite activities of the two ports—Anchorage importing consumer and building goods and MacKenzie exporting raw resources—the two also cooperate and mutually assist each other in their respective missions. “In my sixteen years at Port MacKenzie, this is the best working relationship I’ve had with the Port of Anchorage,” Van Dongen says.

Ribuffo echoes that sentiment; “It makes sense for us to work together to benefit our stakeholders. It’s just better for business.”

The two ports have worked together on several issues: finding a workable ferry landing site (a long term project that ended with the

sale of the Mat-Su Borough’s Susitna); working cooperatively with the US Army Corps of Engineers on a study of the Point MacKenzie shoal; and updating nautical charts to the shifting entrances to both ports. Last October the ports jointly hosted the annual Alaska Association of Harbormasters and Port Administrators conference, which brought over 120 maritime managers, commissioners, and private sector vendors together in Anchorage for training and to discuss harbor and port issues.

They are also planning an annual combined meeting of the respective port commissioners.

Most importantly, they both share a vision of the future where both ports complement the other’s efforts. Empty backhauls are a big impediment to maritime traffic, says Ribuffo. “The ships come in here full of cargo, unload, and leave with mostly empty containers,” he says, precluding port calls by larger, more cost-effective vessels that are being increasingly utilized today.

“One day, maybe fifty years from now,” Van Dongen says, “We’ll see bulk carriers coming in to offload containers from their upper decks at the Port of Anchorage and take on bunkers of coal, ore, or other commodities from Port MacKenzie for their return trip to Asia.” R Alaskan author J. Pennelope Goforth is home ported in Anchorage.

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TRANSPORTATION

Help for Small Boat Harbors State matching grant program improves facilities

By Tasha Anderson

I

n 2006 the Alaska Legislature passed legislation establishing a 50/50 matching grant program: the Harbor Facility Grant Program (AS 29.60.800 et seq.). Mike Lukshin, State Ports and Harbors Engineer for the Alaska Department of Transportation and Public Facilities, presented information about the Harbor Facility Grants Program at the 2015 Alaska Association of Harbormasters and Port Administrators Conference.

The purpose of the program is to assist with projects at municipality or regional housing authority owned small boat harbor facilities.

Lukshin said that essentially any project that takes place within a harbor’s breakwaters is eligible to be considered for funding, including floats, pulley systems, boat launch ramps, etc.; however, the program does not cover preventative maintenance.

Project Criteria

The maximum amount that can be awarded to a project per year is $5 million, and the 50/50 matching is a requirement, meaning that for a $5 million grant to be awarded, $5 million must be raised through alternative sources. While possibilities for funding can include federal aid sources, grant funds, harbor rates, etc., Lukshin said that generally money from other state funds or programs can’t be used as a match. Additionally, the match must be dollar for dollar, and cannot include in-kind work, services, or goods.

Once a project is submitted it is scored based off of standard scoring criteria which include considerations such as safety and emergency factors, whether or not there are other options that reduce or eliminate the need for the project, operational importance, importance of the facility, and whether the project can be labeled as Tier I or Tier II. According to the program’s application, “The first tier has priority and consists of major maintenance and repair of a harbor facility that was previously owned by the state and now is municipally or regional housing authority owned … The second tier consists of all other municipally or regional housing authority owned harbor 108

facilities, including construction of a new harbor facility.”

Once a facility has applied for and received a Tier I grant, from then on it can only compete for Tier II grants, though harbors are eligible for several Tier II grants.

Funding Allocation

The Alaska Legislature determines what amount of money will be allocated to the Harbor Facility Grant Program each year.

Lukshin said that the deadline to submit applications is generally before the Governor formulates a budget, allowing the Governor to be aware of what kind of projects are applying for that year and how much money is being requested. Once the Governor releases a capital budget, it’s turned over to the State Legislature, which makes the final determinations.

Lukshin said that in 2008 and 2012 the allocation was large enough to fund all of the applications, but that’s not usually the case. Generally speaking, once the legislature has determined how much money to allocate, it is then determined which project will be funded. In that case, Lukshin said, “We go line by line in ranked order funding projects with available funds.

There’s no partial funding for any project; we’re only going to fully fund a project. The reason we don’t partially fund is because we are then asking [applicants] to re-scope a project that is already planned with funding already lined up in a certain way.”

He explained that every grant application period is considered a clean slate.

Projects that were not previously funded don’t receive any kind of preference, but are ranked using the exact same criteria.

He did strongly encourage facilities that did not have their projects funded to apply again.

Funding To Date

Lukshin said that, to date, “we’ve met only a little less than half of the needs. So far $162 million has been requested by municipalities and the Legislature has funded only $67.8 million through last year.” However, because of the 50/50 required match, that means more than $135 million in harbor de-

velopment has taken place. The program, so far, has received seventy-seven applications; thirty-two grants have been issued, twentyfive Tier I grants and seven Tier II grants.

At the time of the conference, nine applications had been submitted for consideration in the FY17 budget, totaling a little more than $20.6 million. “Because of the local match, in this case $20.6 million, we’re really saying that $41 million worth of construction-ready projects are potentially going out the door if the Legislature were to fund the whole list; so that doubling factor is huge,” Lukshin said.

Resolution No. 2015-01 of the Alaska Association of Harbormasters and Port Administrators urged the Governor and the Alaska Legislature to fund the full amount “in order to ensure enhanced safety and economic prosperity among Alaskan coastal communities.”

Sitka Transient Float

One of the projects that funded for FY16 is in Sitka. Harbormaster Stan Eliason says that the project is a replacement transient float. It was a Tier I project, and the cost of the replacement is $5.4 million, meaning $2.7 million came from the Harbor Facility Grant Program. “They paid for half and we paid for the other half, which is wonderful,” Eliason says.

He says the current float is forty years old. “It’s not in good shape; it’s a liability.”

The old float was anchored into place, not secured with piles, meaning the new float will be much more secure. Eliason says that when they were inspecting the old float, “just looking at the anchor chains we discovered one the size of a pinky. It’s time to replace it—it has served us well, but we’re going to get a better facility in here. I’m happy this project is moving forward.”

The new transient float will be comprised of sixteen 61-foot floats (for a total length of 976 feet) which at press time were being constructed in Sitka by Northern Construction Services, the general contractor for the project. Once constructed, they will be transferred to the job site for installation.

Eliason says the transient float will act as a breakwater, protecting Thomsen Harbor

Alaska Business Monthly | March 2016 www.akbizmag.com

as well as a portion of Eliason Harbor “and provide open moorage [first come, first serve] for visiting boats that are unable to get into a stall.”

At press time, piles were scheduled to be driven in late January and February, in addition to installing electrical and water systems. The project has a hard deadline of March 15. “March 15 through May 16 there’s no in-water work allowed,” Eliason says. “It’s a regulation to avoid interfering with herring spawning.”

He says that Sitka has several projects on the horizon, “but it’s all about funding. The state is hurting; we don’t know what’s going to happen. If [the state] can’t fund half a project, then we have to do full funding, which could very well mean an increase in moorage rates. Everyone is facing that issue in Alaska, all the harbormasters are.”

Valdez New Boat Harbor

One of the nine applications for FY17 is the New Valdez Small Boat Harbor, which has already begun Phase I of construction: civil work on the harbor uplands, which includes “excavation of soil and rock on Hotel Hill; placement of fill to design grades; construction of new access roads and pedestrian amenities; construction of upland paved parking and storm drain system; a timber boardwalk; future harbor ramp abutments; high-mast lighting; and water, wastewater, power, and lighting utilities with stub-outs for future facilities,” according to the project’s website.

The new harbor will provide increased moorage capacity, additional launch ramps, more waterfront access, and is an “opportunity for service industry development and support for the fishing industry.”

Phase I construction began April 2015 and is expected to continue through 2016.

The scope of work for Phase II includes new floating docks and harbor utilities, including potable water, fire protection, a sewer pump-out station, electrical, and lighting work. The $5 million, Tier II grant that the City of Valdez has applied for would be used toward the purchase and installation of the floating docks, according to Allie Ferko, Deputy City Clerk and Public Information Office for the City of Valdez. The floating docks will create 140 new slips.

R Tasha Anderson is an Associate Editor at Alaska Business Monthly.

www.akbizmag.com

March 2016 | Alaska Business Monthly

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OIL & GAS

The New Arctic Oilfield Hotel

Way better than the old AOH

By Susan Harrington

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or a company that a year ago decided not to divest itself of its Alaska holdings, nothing quite says “We’re committed to Alaska” than investing in the construction of new housing facilities for its employees and to better serve their clients.

The old Arctic Oilfield Hotel (AOH), home for 350 of CH2M’s more than 2,200 employees in Alaska, was built in the '80s with '70s era modules (stacked trailers).

The new AOH, three stories tall with room for 450 employees initially (and potentially 110

600), is being built on the same seven acre pad as the old AOH. It’s centrally located at the corner of Spine and Sag River roads in Deadhorse, close to both guard shacks.

And it’s coming along nicely.

More Room Needed, Better Rooms Wanted Initial project planning began four years ago with the need for more room and growth capacity.

“The biggest impetus is that we have a serious shortage of housing for our workforce in Deadhorse,” says CH2M Vice President of Equipment and Infrastructure Kelly Droop.

The company services a majority of its clients out of Deadhorse—CH2M employees work for a number of clients on any given day with a variety of industry in-

cluding fabrication; construction; specialty services’ operations and maintenance; fluids hauling; rig movements and support; equipment services including crane, light and heavy duty equipment rental, and maintenance; full service vehicle maintenance; facility operators; industrial wash and steam bay; and facility maintenance.

“We were spending millions of dollars housing overflow employees or when we were getting ready for a big drilling season push, we were spending a great deal of funds housing people elsewhere,” Droop says.

Even though there has been an increase in housing in Deadhorse over the last few years, Droop says CH2M wanted something suited for their employees and future capacity for the long run.

“A lot of it wasn’t of the [standard of]

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Home…

Away from Home Rendering of CH2M’s new Arctic Oilfield Hotel in Deadhorse.

When you work in the rugged climate of Alaska’s North Slope, having a comfortable, modern place to rest is a necessity. At Brooks Camp, each sound insulated room includes a private bathroom, rocker recliner,

© Winchester Alaska, Inc.

quality for long-term housing for our employees,” she says. “Our employees live up there year-round 365 days a year. They’re on a rotation but they work year-round, it’s their home. For a lot of them they are there more than at their ‘home-home’ away from work and they deserve some privacy, and some respect, and some amenities that a lot of that temporary housing in Deadhorse doesn’t provide.”

CH2M strived towards providing a camp up to today’s standards of living with amenities taken for granted while still ensuring a cost-efficient solution, especially considering today’s oil prices. Working closely with all contractors from designers to builder and installers was the key to deliver a highwww.akbizmag.com

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The atrium of the new Arctic Oilfield Hotel in Deadhorse will rise up from the front of the building with round windows to the outside in the coffee shop/smoothie bar (above and far right). Large pieces of artwork are planned for the walls in the banquet area (right).

Renderings Š Winchester Alaska, Inc.

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quality project for the next thirty years with all necessities while still remaining within budget. While many areas of the camp are smaller than originally planned, they have managed to pack a variety of the highly desired features into the building.

The New AOH

A lot of work, thought, and feedback went into the design of the new AOH. Winchester Alaska, Inc., headed by Jerry Winchester, began designing the camp in January 2015.

Droop says CH2M selected Winchester because the firm designed many camps recently built on the North Slope and was present for the commissioning when those camps came on line. They wanted to know what was learned from the others—what was right, what was wrong, what could be done differently. They wanted the best camp possible for their employees so they would be rested and ready for work.

“We worked with Winchester, and at 35 percent design we posted the drawings and started soliciting employee feedback,” Droops says. “Then we would return answers to the feedback and post it in our existing camp on the North Slope.”

They also sent those 35 percent drawings to multiple camp builders and camp operators and asked for feedback. The final design emerged with single occupancy, highly efficient rooms designed to have full storage for two employees; alternates can leave all their gear in their own room www.akbizmag.com

in their own lockable closet when they’re off shift. Every room has a vanity and a separate room with a toilet and shower. The showers have glass doors, not curtains. The windows have black out shades. Lighting is LED, dimmable, and the switch is bedside.

There’s a built-in desk. High end, energy efficient boilers provide hydronic heat and there’s a thermostat in every room.

Each room has a smart TV with HDMI by the bed at the desk, which also has a charging station. People can use the flat screen for gaming, a computer monitor, or to Skype family, and CH2M is looking into providing the capability to stream video and access pay-per-view as part of the hotel-like amenities they are considering offering. Every wing will have laundry facilities for residential use, with a separate place for housekeeping to work out of.

Some things we take for granted in other parts of the world can be difficult to come by in Deadhorse. This is why there is an Internet café with espresso and smoothies: a coffee shop feel instead of a lounge.

There’s WiFi and cellular boosters for a strong signal throughout the camp. Other shared areas include an exercise room, a weight room, a recreation room with pool and ping pong tables, and an Internet gaming room, which, Droops says, “is a nod to our up and coming younger workers. Since their own private rooms aren’t massive, it’s their place to go sit on a couch and enjoy Wii with a couple buddies. That would be

fun. Or even just to watch football in there would be fun. So we’re making that available for them.”

ICE Services is performing all of the IT work on the new camp and bringing their hospitality industry experience on the North Slope with them for a cutting edge design.

Like the current camp, the new AOH will have a dry sauna. It was originally eliminated from the new design, but put back in after feedback from employees, which heavily influenced the shared amenities throughout.

In addition there will be a commissary and a locker room on the first floor. The big kitchen and main dining hall are also on the first floor, with seating for more than two hundred. The new AOH has a larger than normal spike room with a delistyle sandwich bar so employees can pack a lunch before going on shift. Employees tend to eat in their rooms after shift and stop by the dining hall to pick up meals to go. With two shifts operating, people come and go at different hours and the dining hall is open slightly longer hours to accommodate everyone.

The new AOH is going to be a great place for employees to come home to after working a long shift; and its copper penny siding and symbolic circle windows going up front and center to the second floor will add some class to the neighborhood.

Part of CH2M’s new logo has a tiny circle, a dot that symbolizes the globe, the world,

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the people, and the possibilities. “We’re using the circle in the carpeting, windows, and maybe the art,” Droop says.

Other Design Features

Safety, energy efficiency, and quiet are three design features important to CH2M for the new AOH. “Safety, of course, was number one. We definitely wanted our camp fully sprinklered,” Droop says. They are putting all the firewater tanks in an adjacent utility building that is not being demolished.

Also, the boilers for the heating system, the insulation envelope with high value insu-

lation, water efficient fixtures, and electrical infrastructure with all LED lighting are all highly energy efficient. “We’re really focused on energy efficiency at this camp,” she says.

Something else important was simply quiet. “We wanted to do soundproofing to prevent fatigue because we wanted to protect our people and one way is getting a good night’s sleep. We want them rested to be driving and operating equipment and it’s hard to get a good night’s sleep up there, especially in an older camp,” Droop says.

Phase One in Full Swing

Construction of the project is well under-

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way. Bob Anderson and Darin Marin are the two CH2M project managers. They alternate working on site and back in Anchorage—when Anderson is on the slope, Marin is in town working quality aspects and vice versa. There are a lot of components to manage and coordinate.

All contracts were awarded through CH2M’s strict procurement process.

Builders Choice, Inc. was awarded the contract last October to manufacture the modules in their factory in Anchorage, convenient for CH2M, which has an office at the plant for their QC effort. Module construction began in November 2015.

“They have a great reputation and they’ve been amazing to work with so far,” Droop says of Builders Choice. “We worked with both Winchester and Builders Choice to make sure we did staggered walls; which allows the insulation to get between the studs. You have a two by six wall with two by fours in between and the insulation is woven between them. We made a real effort to address soundproofing.”

Let’s Be On Our Way

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The first modules were finished in December 2015 and shipping began right at Christmas.

“Our shipper is Carlile and they are doing all the transportation for us,” Droop says. “It’s a pretty big project. We have over 150 modules coming up for the first phase and about 30 more, so overall it is about a 180 module project.”

Carlile is transporting six to eight modules a week at peak production.

Criterion General was selected as the general contractor; they’ve done several projects with CH2M in the past and Droop says they are “sticklers for quality.”

Before all that construction could begin, though, a portion of the old camp had to be demobilized—at least part of it. The first step for Droop was to relocate 150 employees into temporary housing offsite in Deadhorse. She did that the last week of January, by then twenty modules manufactured

by Builders Choice were on site, delivered

by Carlile. Moving the employees was followed with the process of demobilizing three of the north facing wings at AOH. “The new camp has a much more efficient footprint,” Droop says. “We have over 110 acres and about twenty-five facilities in Deadhorse, but we’re replacing the camp at the same location as the old one because we have an existing water and wastewater facility that we’ll be using to service this new facility.”

Not everything being demobilized gets destroyed.

“We’re saving a few more-recent wings that were newer additions to the camp for future use, for ‘farther away from Dead-

Alaska Business Monthly | March 2016 www.akbizmag.com

The existing Arctic Oilfield Hotel in Deadhorse, early February. Š CH2M

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horse’ projects,” Droops says. They’re saving a few to reuse “Out West”—what they call the area where the development is going on. Droop sees it as a sustainable option and future opportunity for CH2M to provide housing farther away from Deadhorse to save their clients commute time. In the future, this type of asset could support additional remote work at places like CD5, where CH2M recently completed a module installation project.

Central Environmental, Inc. was selected for disposal of the remaining older AOH modules. CH2M is also using their expertise to do demolition.

Sharing the Work

“I probably shop for cranes more than I go shopping for shoes.”

—Kelly Droop.

Vice President Equipment and Infrastructure CH2M

Not every facet of the project is being contracted out. The company decided to selfperform the foundation setting—CH2M has been setting piling for many years on the North Slope. “It’s one of our specialties,” Droop says. “We’ll be drilling and setting our own piles with our crane fleet; then our specialty crane division in addition to doing the pile setting will also be erecting the camp, doing all the picking, and setting the modules for Criterion.”

In addition to infrastructure and real estate, part of Droop’s role is equipment. CH2M has more than one thousand pieces of equipment

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in their fleet and has an emphasis on fluid hauling and transportation that includes more than one hundred heavy tractors. As of 2016, they own fifty-two 325BBL Vacuum Trailers.

With thirty cranes—ranging from 30-ton boom trucks to 440-ton crawler cranes— CH2M has the largest crane fleet on the North Slope. “I probably shop for cranes more than I go shopping for shoes,” Droop says. “I bought a lot of cranes this year and we have actually a really renewed crane fleet. We’re pretty excited.”

They’re also pretty excited about the whole project.

“It is definitely going to be a lot more efficient,” Droop says. “We can get all of the main kitchen, dining room, the elevator, all the core, up and running in this new camp and commission what we’re calling phase one and it will house 350 people by July, which allows me to move everybody I’ve currently been housing in my old camp in—the 150 I moved down the road and the 200 I still have in my old camp that we’re disconnecting now.”

No more double rooms, no more bathrooms down the hall.

Phase Two

After that the next phase begins. “Then we have a little bit different decommissioning with the main original core of the camp because it has to be basically scraped off,” Droop says.

Once Central Environmental removes the rest of the old camp the new south wings will get finished and the new AOH will be fully online by the end of the year.

Currently, CH2M is building for 450 beds and an option to increase to 600 beds with VESTA Housing Solutions was under negotiation at press time in early February. CH2M was also in negotiation with ESS Support Services Worldwide to be camp operator.

Either way, it’s one of the largest capital projects for CH2M and positions the company’s Alaska workforce with a competitive edge—quality housing for quality people.

“Regardless of the apprehension about what’s coming, what the next year is going to look like, we still need a great place for our employees for the next thirty years,” Droop says.

“It helps us control our own destiny when we can house our own workforce. They just need a quiet, private place to live with good food. Our employees remain our most valuable resource in service to our clients, thus the investment in their health, safety, and well-being ensures we’re at our best to deliver excellence on the job as our clients expect.”

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Susan Harrington is Alaska Business Monthly’s Managing Editor.

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Point Thomson Editor’s note: Sometimes our editorial deadlines clash with intense activity by the very subjects of the stories we’re hoping to tell. This happened with our planned Point Thomson update for the March issue so we’ve moved the story to May and are sharing information from the project website.

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Point Thomson Central Pad, December 2015. Š Exxon Mobil Corporation

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oint Thomson is located on state acreage along the remote Beaufort Sea, 60 miles east of Prudhoe Bay and 60 miles west of the village of Kaktovik. www.akbizmag.com

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The Point Thomson reservoir holds an estimated 8 trillion cubic feet of natural gas and 200 million barrels of natural gas condensate, a high quality hydrocarbon similar to kerosene or diesel. The Point Thomson gas represents about 25 percent of known gas resources on the North Slope.

ExxonMobil is developing initial production facilities to produce up to 10,000 barrels per day of natural gas condensate.

The condensate will then be transported by a 22-mile pipeline which connects into the Trans Alaska Pipeline System.

Point Thomson The initial phase of Point Thomson establishes critical infrastructure for current and future Point Thomson developments. It is an important learning experience to reduce uncertainty and to gather data for future phases of

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Point Thomson development. Lessons gained from this high pressure gas condensate cycling project on the North Slope will be key to unlock Point Thomson’s future potential.

During operations, initial phase onshore facilities will be used to recover natural gas condensate located primarily offshore in the reservoir, using proven long-reach drilling technology. Two injection wells will work in tandem with a production well, cycling up to 200 million cubic feet of natural gas per day through an onsite central processing facility. Condensate will then be transported by pipeline and gas reinjected for future recovery.

Building Point Thomson facilities requires extensive onsite infrastructure designed to minimize the project’s footprint.

Since October 2012, we’ve constructed the following critical pieces of infrastructure:

 Housing and facilities with capacity for more than 200 people onsite  Expansion of existing gravel pads to support onsite facilities  Installation of a 22-mile pipeline that will bring new gas condensate resources to the Trans Alaska Pipeline System  Fuel tanks to support onsite activities and project expansion  A new, onsite airstrip  A service pier  Infield roads for onsite transportation

What Point Thomson means for Alaska Point Thomson is opening up a new area of the North Slope. Our work with our Alaskan partners is making Point Thomson possible.

We are building initial production facilities designed to produce up to 10,000 bar-

Alaska Business Monthly | March 2016 www.akbizmag.com

rels of natural gas condensate per day. Those facilities will connect to the Trans Alaska Pipeline System, and are projected to bring new resources into the system in 2016.

ExxonMobil Alaska has invested more than $4 billion in Point Thomson—more than 70% of that in Alaska. During our summer 2014 work season more than 1,200 Alaskans were directly engaged in working on the project.

In 2014 ExxonMobil installed a 22-mile pipeline. In addition, we will complete gravel and civil infrastructure work on site. The work will leverage our network of contractors, involving 700 personnel on the North Slope and many more across the state.

Slope. The investments made will open the eastern North Slope to new development and lead to increased production into the Trans Alaska Pipeline System.

With our Alaskan partners, the ongoing work and investments in Point Thomson are also laying the foundation for future gas development. Alaska has the opportunity to become a global natural gas leader.

We are excited to be contributing to the next chapter in Alaska’s energy legacy.

Environment & Safety

It is our goal to develop Point Thomson safely and responsibly. We believe that

strong safety and environmental performance is integral to overall successful project performance.

ExxonMobil strives for a workplace that will enable us to achieve our clear and simple safety standard: Nobody Gets Hurt.

This goal includes our neighbors and contractors, as well as our employees. All Point Thomson workers participate in rigorous safety training, related to both site risks and the specific hazards associated with individual roles. Workers are trained, supported, and ready to work safely, every day.

Throughout planning, design, and construction of Point Thomson, ExxonMobil

Future Opportunity

Point Thomson marks a new era both for ExxonMobil in Alaska and the North

Point Thomson Central Pad at dawn in early January, shortly after noon. © Exxon Mobil Corporation

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© Exxon Mobil Corporation

Sunrise at Point Thomson Central Pad in January.

has made it a priority to avoid or minimize environmental impacts. We have designed comprehensive mitigation measures to minimize impact on tundra, wildlife, aquatic resources, and subsistence activities.

Protecting Wetlands, Streams, Lakes, and Marine Waters  Utilizing shore-based long-reach directional drilling to reduce the impact on off-shore resources  Using existing gravel pads to reduce overall new tundra footprint by more than 20 acres  Designing pads, roads, bridges and culverts to maintain natural drainage patterns and stream flows to the extent possible  Using bridges instead of culverts to benefit fish passage and streams flows Wildlife & Wildlife Habitat

 Using marine mammal and wildlife protection plans that are recognized by the U.S. Fish and Wildlife Service as a North Slope industry best practice  Elevating pipelines designed to provide a minimum clearance of seven feet from the tundra for reducing impacts on wildlife movements  Locating barge route inside barrier islands and away from the main fall migration corridor of bowhead whales  Requiring routine aircraft flights to generally fly at a 1,500 foot altitude 122

following a path inland from the coast to avoid disturbance to wildlife and subsistence activities

Polar Bear Protection

Polar bears are known to den along Alaska’s Beaufort Sea coast, in those areas with habitat that will support such denning.

ExxonMobil has taken several measures to minimize its impact on polar bears:  Using forward-looking infrared cameras to survey the surrounding areas to identify and avoid potential bear dens  Utilizing procedures and communication protocols for wildlife encounters, which include closure and potential rerouting of ice roads in the event of a polar bear sighting  Training employees and contractors to avoid and mitigate interaction with wildlife

Point Thomson Neighbors

A core component of ExxonMobil’s vision for Point Thomson is to be a good neighbor.

ExxonMobil began consulting with North Slope Borough government officials and residents on drilling and production plans in 2008.

Our ongoing consultation involves an open dialogue between ExxonMobil and residents of the North Slope Borough on how suggestions and recommendations are addressed and incorporated into design, location, construction, and operations. We

are committed to maintaining a positive working relationship built on trust and collaboration with the North Slope Borough, Kaktovik, Nuiqsut, Alaska Eskimo Whaling Commission, Native allotment owners and heirs, the Iñupiat community of the Arctic Slope, as well as many others.

ExxonMobil is involved in a number of ongoing initiatives to communicate with local residents about the Point Thomson development. The Kaktovik community has been a primary focus in developing collaborative programs at Point Thomson.

Kaktovik Point Thomson Working Group  In order to facilitate communication throughout the life of the project, Point Thomson collaborated with Kaktovik to establish the Kaktovik-Point Thomson Working Group  The working group is primarily composed of local village elders as well as individuals from the Kaktovik Iñupiat Corporation, the Village of Kaktovik, the City of Kaktovik, and the Kaktovik Whaling Captains Association  The working group provides a forum for the community to advise ExxonMobil on measures to mitigate impacts through design, construction, and operations  Design features that were incorporated as a result of the working group’s input include:

Alaska Business Monthly | March 2016 www.akbizmag.com

We help Alaskans turn challenge into opportunity.

As one of the largest employers in the state, CH2M is committed to providing Alaska with integrated, scalable and flexible solutions. We provide services for program management, facility siting, planning & environmental services, pre-FEED, FEED, detail design engineering, contracts, procurement, warehousing, sealift & truckable module fabrication, field construction, and operations and maintenance.

Contact us alaska@ch2m.com

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Alaska’s Full Service Remote Camp & Catering Company Since 1982

n Increased pipeline wall thickness: To withstand incidental bullet strikes from coastal subsistence hunters, we designed a pipeline with thicker walls in certain locations n Rounding of gravel pad corners: The gravel pads were designed with rounded corners to reduce profile and possible impact to caribou movement n Reduction of potential adverse visual effects: The Point Thomson pipeline and gathering lines are textured and coated to reduce sun glare and contrast. Additionally, Point Thomson permanent facilities are painted a pacific blue color to reduce off-site visual effects

Kaktovik Community Foundation

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1701 East 84th Avenue Anchorage, AK 99507 Contact Kurt Winkler (907) 349-3342 kurt@globalsrvc.com www.globalsrvc.com

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ExxonMobil assisted Kaktovik in establishing the Kaktovik Community Foundation (KCF) to provide a mechanism for corporate giving that meets community needs in a sustainable way. The Foundation’s goals reflect those of the Kaktovik community—to promote Inupiaq interests and values, to build a strong community, and to encourage life-long learning. ExxonMobil contributed to KCF’s initial funding efforts with a seed donation, part of which was dedicated to the development of a community ice cellar.

Kaktovik and Barter Island Archaeology As part of its agreement with the U.S. Army Corps of Engineers, and in cooperation with local agencies, ExxonMobil partnered with residents of Kaktovik to assess cultural resources on Barter Island. With the help of local experts and a high school intern, and in cooperation with local agencies, the Point Thomson archaeology team employed sophisticated technologies to record artifacts and investigate heritage sites.

Some of these technologies and excavating techniques were later taught to students in the Harold Kaveolook School through ExxonMobil’s Science Ambassador Program.

Science Ambassador Program

ExxonMobil initiated the Science Ambassador Program in the Harold Kaveolook School in Kaktovik in 2009. This program involves ExxonMobil professional employee volunteers who teach science and/ or math lessons to students in the school.

Through this program, the school is then eligible for grant money from ExxonMobil. Lessons presented in Kaktovik to-date include: archaeology, chemistry, drilling, refining, and geology. © Exxon Mobil Corporation

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Inside

Alaska Business March 2016 GENERAL DYNAMICS eneral Dynamics Information Technology, a business unit of General Dynamics, was awarded a contract to support the US Air Force Air Defense Communications Service 3 program. The single-award, task order contract has a potential value of approximately $80 million for five years, if all options are exercised. Under the task order, General Dynamics will provide single system management, maintenance, lifecycle, and logistics support of the existing communications systems and subsystems used in North American Aerospace Defense Command and Pacific Air Forces Air Defense missions. The task order will be performed at Joint Base ElmendorfRichardson and additional locations across the United States and worldwide. gdit.com

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COLD COAST LLC old Coast LLC launched an online marketplace to support Alaskan artists and businesses with the intention of selling Alaska Native crafts, such as carved ivory, antlers, or animal pelts. Although the Made in Alaska program is not affiliated, Cold Coast supports businesses that have taken the time to register their craft to the State of Alaska. While many restrictions on Alaska Native handicrafts are still not solidified,

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Compiled by Russ Slaten Cold Coast has been guided by US Fish and Wildlife and Made in Alaska to ensure compliance. The website intends to feature stories on sellers that have a great story to tell about their work and their lives. coldcoast.us HALL, RENDER, KILLIAN, HEATH & LYMAN all, Render, Killian, Heath & Lyman, one of the nation’s largest law firms focused on the healthcare industry, has opened a new office in Anchorage—the firm’s second location in the Pacific Northwest. The firm will focus its legal practice on business and corporate transactions, healthcare, and employment law. In conjunction with establishing its Seattle office earlier in 2015, the firm is more able to broadly and locally serve healthcare providers across Alaska, Oregon, and Washington. hallrender.com

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DANTECH SERVICES, INC. resident of DanTech Services, Inc., Dan Foote, has joined Robin Robins and a select group of twenty-five other cyber security experts and entrepreneurs from around the world to co-write the book titled, “Under Attack: How To Protect Your Business and Your Bank Account From Fast-Growing, Ultra-Motivated and Highly

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Dangerous Cybercrime Rings.” Nick Nanton, Esq. along with business partner, JW Dicks, Esq., the leading agents to Celebrity Experts worldwide, signed a publishing deal with each of these authors to contribute their expertise to the book, which was released under their CelebrityPress imprint in January. dantechservices.com ALASKA USA FEDERAL CREDIT UNION laska USA Federal Credit Union expands its relationship with Cardtronics, joining the Allpoint Network, expanding surcharge-free ATM access by fifty-five thousand retail ATMs worldwide. All Alaska USA branch network and offsite ATMs, including Allpoint Network locations, can be found using the Alaska USA ATM locator available at the credit union’s website. The new Allpoint agreement marks the second time Alaska USA has looked to Cardtronics to provide its members with expanded offsite ATM access. alaskausa.org

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ALASKA SEA GRANT laska Sea Grant launched the FishBiz website to allow Alaska commercial fishermen in search of business management assistance to find a wealth of information, including training tools on getting

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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 March 2016 | Alaska Business Monthly

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INSIDE ALASKA BUSINESS into the business, financing, income diversification, exit strategies, and many other topics. Alaska Sea Grant Cordova agent Torie Baker and Petersburg agent Sunny Rice reorganized former website resources to match fishing career phases and added new tools and brought others up to date.

The new design is appealing and easy to use, with customizable financial spreadsheets and podcasts of popular workshops.

CoBank, a national rural cooperative bank, provided partial funding for the website improvements. fishbiz.seagrant.uaf.edu

from that state. Before the law was enacted, pollock from both Russia and Alaska were sold in the United States under the name “Alaska pollock,” making it impossible for consumers to determine product origin. Alaska pollock producers will be moving next to seek changes in EU labeling requirements so that superior quality, sustainably managed Alaska pollock is transparently identified in one of its largest export markets. alaskapollock.org

RESOURCES ENERGY, INC. he State of Alaska extended its cooperation agreement with Japan-based consortium Resources Energy, Inc. to develop Cook Inlet natural gas. This agreement extension comes three months after Alaska Governor Bill Walker met with more than twenty-five companies and government agencies, including the prefectures of Kyoto and Hyogo, during an international LNG (liquefied natural gas) conference in Tokyo, where he told more than a thousand attendees of the Alaskan LNG opportunity.

The agreement with Resources Energy, Inc., which was extended two more years to December 14, 2017, encourages the development of Cook Inlet natural gas to provide Alaskans low-cost energy while also supplying Japanese consumers. rei-lng.com

NORTHERN DYNASTY MINERALS LIMITED ancouver, Canada-based Northern Dynasty Minerals, a mineral exploration and development company with the Pebble Project in southwest Alaska as its principal asset, acquired 100 percent of the issued and outstanding common shares of Mission Gold Limited. The arrangement was approved by 100 percent of the votes cast by security holders of Mission Gold at an annual general and special meeting on December 21, 2015. Final approval for the Arrangement was obtained from the Supreme Court of British Columbia on December 23, 2015. Pursuant to the arrangement, Mission Gold amalgamated with a whollyowned subsidiary of Northern Dynasty to form a merged company that is whollyowned by Northern Dynasty. northerndynastyminerals.com

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ASSOCIATION OF GENUINE ALASKA POLLOCK PRODUCERS ongress passed and President Obama signed the federal omnibus spending bill in December that changes the market name of the nation’s largest fishery from “Alaska pollock” to “pollock” and also requires that the geographic descriptor “Alaska” be used only on pollock harvested

PFEFFER DEVELOPMENT LLC IRI has sold its property management company, Pacific Tower Properties, Inc., to the Alaska real estate development company Pfeffer Development LLC, owned

by Mark Pfeffer. Until recently, Pacific Tower Properties was a wholly owned subsidiary of CIRI Land Development Company and provided commercial real estate manage-

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ment and brokerage services. Pacific Tower Properties will continue to provide brokerage services and management of more than 4.5 million square feet of commercial and institutional real estate at more than fiftyfive sites statewide. Although Pacific Tower Properties will no longer be a member of the CIRI family of businesses, the management company will remain CIRI’s property manager. pfefferdevelopment.com SOUTHWEST ALASKA MUNICIPAL CONFERENCE he Southwest Alaska Municipal Conference will work with Alaska Sea Grant to support the development of small manufacturing businesses in Alaska through a new five-year federal grant, starting with the seafood industry. Other partners include the Southeast Conference and the Anchorage Economic Development Corporation. The new Manufacturing Alaska Extension partnership, or MAKE, of the Southwest Alaska Municipal Conference will focus on services provided by the Alaska Sea Grant Marine Advisory Program. Alaska Sea Grant will teach seafood processor training at the University of Alaska Fairbanks Kodiak Seafood and Marine Science Center. swamc.org

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DIAMOND GOLD CORPORATION iamond Gold Corporation plans to build and operate a one hundred ton per day custom hard rock mill in the Seward Mining District. The mill will be located along the Seward Highway Corridor at Moose Pass, Crown Point, or at Seward. Ore to feed the year round mill will be purchased and mined from the small gold-Quartz mines at Hope, Summit Lake, and Crown Point.

Additional ore may be acquired from the Port Wells gold-quartz district and shipped through Seward or Whittier to the Diamond

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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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Compiled by Russ Slaten Gold Corporation mill. Diamond Gold Corporation says it will outfit a fully-benefited twenty to twenty-five person workforce with an estimated $2.5 million annual payroll. diamondgoldcorporation.com ALASKA ENERGY AUTHORITY he US Department of Energy intends to make available $4 million to the Remote Alaska Communities Energy Efficiency Competition for small Alaska communities to develop and implement energy efficiency projects with outreach support from the Alaska Energy Authority. The Department of Energy intends to make up to $600,000 available for technical assistance for up to twenty communities who pledge to reduce energy use by conducting building audits and energy use benchmarking; holding community energy fairs; and assisting with business plan development, project financing opportunities, and risk assessment.

The final phase of the competition plans to award up to $3.3 million in competitive grants to up to five communities for implementation of the community energy efficiency plans. akenergyauthority.org

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DSI, INC. SI, Inc., a woman-owned communications infrastructure company in Anchorage, utilized Zhone Technologies FiberLAN solution, a next-generation Optical LAN solution, at K-12 Grace Christian School in Anchorage. Zhone Technologies and DSI collaborated to create a solution that provides reliable high-speed data, voice, and video services for sixty teachers and six hundred students at Grace Christian. A case study from Zhone Technologies outlines that the deployment of a new, reliable network gave teachers confidence to use network-connected technology in their lessons. With the new

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network infrastructure, operating and maintenance issues were virtually eliminated. zhone.com/grace-christian TIKAHTNU COMMONS ikahtnu Commons, owned by Cook Inlet Region, Inc., continues to expand with the recent addition of Anchorage’s first Panda Express Chinese restaurant. With the addition of Panda Express, Tikahtnu Commons is now about 95 percent built out, with only a handful of storefronts still available for lease. Tikahtnu Commons has become Anchorage’s largest retail and entertainment center, representing one of CIRI’s most successful investments. ciri.com

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ALASKA AIRLINES laska Airlines unveiled its first major brand change in twenty-five years. The refreshed brand was introduced on a newly painted Boeing 737-800 and soon will be featured throughout the airport experience, on all digital channels, in marketing materials, and across Alaska Airline’s entire fleet. The most visible changes to the brand are the wordmark, the Eskimo icon, and a bold, new color palette. By press time Alaska Airlines expected to take delivery of four Boeing 737s with the new paint theme.

Forty planes in the new livery along with all 111 airports Alaska Airlines and its regional partners serve are expected to be rebranded near the end of the year. alaskaair.com

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CORVUS GOLD, INC. ancouver, Canada-based Corvus Gold, Inc. announced that its wholly owned Alaska subsidiary, Raven Gold Alaska, Inc. has signed an agreement with Gold Reserve, Inc. for the sale of its LMS project in

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the Pogo Mining District in Interior Alaska.

Cash at closing was $350,000. The project is being sold for cash and a retained net smelter return royalty, with final closing pending TSX Venture Exchange approval. corvusgold.com ALASKA CLUB he Alaska Club celebrates thirty years of health and fitness. February 11, 1986 was the start of it all. Anchorage real estate professional Andrew Eker and former Alaska Pacific Bank president Tom Behan, along with a group of fifty investors, bought the Alaska Teamsters’ recreation center in east Anchorage and established The Alaska Club East. By 1997 there were locations across three major markets, and today there are fourteen locations across the state.

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PROVIDENCE IMAGING CENTER rovidence Imaging Center in Anchorage has a new MRI machine with a larger bore opening and many sequences that reduce the loud gradient noises most scanners generate. The new machine provides a roomier interior, and the time spent inside the “tunnel” will sound less like a busy construction site.

A new mobile mammography coach with 3D technology will arrive this summer. It will replace the 2005 bus that has provided approximately 1,500 breast cancer screening tests annually. Additionally, the Eagle River center received a new ultrasound machine and a computed radiography reader replacement. provimaging.com R

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RIGHT MOVES Anchorage Superior Court

Dani Crosby was appointed to the Anchorage Superior Court by Governor Bill Walker. She has practiced law for nearly twenty years, focusing on employment issues, complex business disputes, and family law matters. She worked Crosby as a private practice attorney for Dani Crosby Law Office, Inc. and was an attorney at Ashburn & Mason, P.C. for fourteen years. Crosby earned a BA in English and Comparative Literary Studies from Occidental College and a JD from Gonzaga University School of Law.

Matanuska Electric Association

Tony Izzo was appointed new General Manager of the Matanuska Electric Association. Izzo has worked for MEA as the Manager of Fuel Supply since April 2012 and brings thirty-four years of experience in utility operations, lead- Izzo ership, and regulatory relationships, including time as the CEO of ENSTAR Natural Gas.

Alaska Senate Democratic Caucus

Jeanne Devon joins the Alaska Senate Democratic Caucus as Minority Press Secretary. Devon is a best-selling author and founding editor of The Mudflats blog and is a contributing writer for The Huffington Post.

CRW Engineering Group LLC

CRW Engineering Group LLC welcomes four new professionals to its team.

Calli Rabe joins the CRW IT Department. Rabe brings more than five years of technical experience in computer systems and Rabe services. She was a technical specialist for the Alaska Department of Natural Resources. Rabe earned a BA Literature from the University of Alaska Anchorage.

Corey Rogers, EIT, joins the CRW Electrical Engineering Department. He brings sixteen Rogers

years of electrical engineering experience. Rogers earned a BS in Electrical Engineering and Applied Mathematics from the University of Alaska Fairbanks.

Ben Hron, PLS, joins the CRW Land Surveying team. Hron Hron graduated from Milwaukee Area Technical College and has thirteen years of Land Surveying experience, including ten years in Alaska.

Bryant Burgin, LSIT, also joins the Land Surveying team.

Burgin holds a BS in Geomatics Surveying from UAA and brings Burgin five years of surveying experience across Alaska.

Alaska Department of Corrections

Walter Monegan III was named Interim Commissioner of the Alaska Department of Corrections.

He was most recently the president of the Alaska Native Justice Center. Monegan Monegan was appointed Commissioner of the Alaska Department of Public Safety from 2006 to 2008 and served as Chief of Police at the Anchorage Police Department from 2001 to 2006, with a thirtythree year history with the police department.

Alaska Gasline Development Corporation

Luke Hopkins joins the Alaska Gasline Development Corporation Board of Directors. Hopkins is the former mayor of the Fairbanks North Star Borough. He served on the Fairbanks North Star Borough Planning Commission Hopkins for seven years and was a Borough Assembly member for more than five years.

Hopkins has been involved in a wide variety of local and statewide boards and commissions, including the State of Alaska Municipal Advisory Gas Project Review Board and the Alaska Gasline Port Authority.

NORTECH, Inc.

Tim Shaw joins NORTECH’s Anchorage office in the Environmental Services Department. He

was a mining exploration geologist and has more than twenty years of environmental consulting experience. Shaw holds a forty-hour Hazardous Waste Operations and Emergency Response certificate, is an EPA/AHERA-certified Building Inspector, and has been designated a Certified Environmental Specialist by the National Registry of Environmental Professionals.

Alaska Railroad Corporation

Christy Terry was promoted to the Port Manager of Seward for the Alaska Railroad Corporation.

Terry has worked as Seward Dock Operations Manager for the Alaska Railroad since 2010 and brings an extensive knowledge Terry of Alaska Railroad operations in Seward. Terry has served as the Community Development Director for the City of Seward and is a Certified Port Executive.

Anchorage Economic Development Corporation

Moira Sullivan joins the Anchorage Economic Development Corporation as the new director for Live.Work.Play. Sullivan worked two years for the US Treasury Department in Washington, DC, as a policy adviser in the Office of Capital Markets and most recently as the communications manager for the Small Business Lending Fund and State Small Business Credit Initiative programs. She earned a bachelor’s in History from Dartmouth College and a master’s in Finance from Trinity College in Dublin.

Arctic Slope Regional Corporation

Shalon Harrington joins Arctic Slope Regional Corporation as its new Director of Government Affairs in the External Affairs Department. Most recently, she was the Director of Government Affairs for the Municipality of Harrington Anchorage. Harrington was chief of staff to a state senator for six years before joining the governor’s team as a legislative liaison. She worked for the US House Resources Committee in the Office of Native American & Insular Affairs

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Compiled by Russ Slaten in Washington, DC. She earned a BA in Political Science from the University of Nevada Reno.

NOAA Fisheries

Jeffery Kauffman of NOAA Fisheries, based in Wasilla, was appointed by the US State Department as an alternate commissioner to the International Pacific Halibut Commission in the Alaska Resident seat to serve on an interim basis until Presidential appointment is made. Robert Alverson of Bothell, Washington, will serve on an interim basis in the non-Alaska Resident seat.

Denali Alaskan Federal Credit Union

Mary Michaelsen was named Member Contact Center Outbound Manager at Denali Alaskan Federal Credit Union. She has more than Michaelsen seven years of experience in the financial industry and worked at Navy Federal Credit Union. She also was a call center operator at the Iowa State University Foundation. Michaelsen earned a bachelor’s in Communications from Iowa State University.

Credit Union 1

Credit Union 1 promotes multiple managers in Anchorage.

Kelly Smith was promoted to Regional Branch Manager of Credit Union 1. Smith began as a teller and later held the positions of member services assistant, member service officer, branch manager of the Eagle River Branch, and, most recently, Smith branch manager of the credit union’s Mountain View Branch.

Nicki Gardepe was promoted to Branch Manager at the credit union’s Mountain View Branch.

Gardepe began with Credit Union 1 as a consumer loan officer and later became the member service center manager, credit solutions Gardepe loan officer, and assistant manager at the Mountain View Branch.

Miri Bardello was promoted to Member Assistance Manager in Credit Union 1’s member

assistance department. Bardello began as a teller at the Midtown Branch and has served as a real estate loan servicer, member service center assistant manager, assistant branch manager, and consumer loans assistant manager. Bardello Chad Johnson was promoted to information Technology Projects Manager. Johnson started as a teller, and has worked up to become credit solutions loan officer, staff trainer, marketing writer, information technology support assistant, and his most recent position as information Johnson technology business analyst.

in logistics by the SMEAL College of Business Administration at Penn State University and the Fisher College of Business at Ohio State University.

Northrim Bank

Larry Gluck joins Northrim Bank as AVP, Lending Quality Assurance Officer in the Credit Administration Department. Gluck has twentyeight years of experience in banking, working for regional and community Gluck banks in Florida. He held positions in credit administration such as credit analyst, credit manager, and senior credit officer. Gluck earned a BS in Accounting from Fairleigh Dickinson University.

UIC Foundation

Mat-Su Health Foundation

Carol Agnigalak Murphrey joins the UIC Foundation as its Program Manager. Murphrey worked with UAF for the past eighteen years in student services. She was an academic advisor for UAF’s Rural Murphrey Student Services. Murphrey earned a bachelor’s in Business Administration and a master’s in Rural Development from UAF.

Christopher Emond joins the Mat-Su Health Foundation as Director of Finance. He was the director of treasury at Alaska Communications. Emond earned a BS in Finance from the University of Houston and serves as an officer Emond on the board of directors for the Alaska E-Health Network.

University of Alaska

Foss Maritime Company

John Parrott joins the Foss Maritime executive team as Chief Operating Officer. Parrott was President of TOTE Maritime Alaska for sixteen years. Parrott earned a BS in Marine Transportation from Parrott the US Merchant Marine Academy and an MBA from Seattle University. He is a licensed master in the US Merchant Marines and holds a commission in the United States Naval Reserve.

TOTE Maritime Alaska

Greg Busch was appointed Interim Chief Risk Officer for the University of Alaska. He was the University of Alaska’s director of emergency management. Busch has fourteen years of experience Busch leading effective emergency management programs in education and healthcare settings. He earned a BA in sociology from North Dakota State University and an MBA from the University of Mary.

Alaska Tourism Marketing Board

Michael Noone was named President of TOTE Maritime Alaska.

He joined TOTE Maritime Alaska as Chief Operating Officer in 2013, bringing twenty-eight years of experience in the shipping and Noone logistics field. Noone earned his bachelor’s from Wagner College and is certified

Governor Bill Walker made six appointments to the Alaska Tourism Marketing Board. The four newly appointed members include Scott Habberstad, Alaska Airlines; Shanon J. Davis, Kenai Peninsula Tourism Marketing Council; Deborah Hickok, Explore Fairbanks; and Thomas McAleer, Alaska Denali Travel.

The two re-appointed members include Chuck Baird, Waterfall Resort, and Deborah L. Hansen, Pike’s Waterfront Lodge.

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Accolades A

s part of its 2015 Coats for Kids project, The Salvation Army collected and distributed more than three thousand coats for Alaskan children in need. The programs partners include KTUU, which donated $20,000 of advertising airtime; Fred Meyer, which donated $15,000 of new coats; Lynden Transportation, which donated shipping costs both to Alaska and within the state; and Fireweed Cleaners, which donated dry-cleaning for more than one thousand of the donated coats. salvationarmyalaska.org.

Cook Inlet Tribal Council is the sole Alaska-based partner of KIDS (Kids in Distressed Situation) and coordinated with the program to distribute a shipment of children’s toys and apparel valued at $1.3 million to more than six thousand Alaskan children. The first distribution took place in October 2015. citci.org Anchorage Water & Wastewater Utility was one of eight national public drinking water systems to receive a Platinum Award for Utility Excellence by the Association of Metropolitan Water Agencies at its 2015 Executive Management Conference. Platinum Awards recognize outstanding achievement in implementing the nationally recognized Attributes of Effective Utility Management. awwu.biz Poldine Carlo of Fairbanks was awarded the 2015 Shirley Demientieff Award by Governor Bill Walker and Lieutenant Governor Byron Mallott. Presented by the Governor each year at Alaska Federation of Natives, the Shirley Demientieff Award recognizes an individual or organization for their outstanding advocacy efforts on behalf of Alaska Native women and children. gov.alaska.gov Paddy Coan, Manager of the Wasilla branch of Jack White Real Estate, was named the recipient of the Alaska Association of REALTORS 2015 REALTOR® of the Year award. This award is given annually to the individual who has displayed a strong sense of REALTOR spirit; leadership qualities with local, state, and national associations of REALTORS; and involvement in civic activities. alaskarealtors.com Anchorage-based Alaska Chip Company won second place at the Chicago Tribune’s best kettle chips competition. Alaska Chip Company, which uses Alaska Grown potatoes and is Alaska’s only chip company, competed against 150 other brands from around the United States to bring home the second place award. akchip.com Alaska Regional Hospital has been recognized for its commitment to healthcare with a 2015 Quality Award from Mountain-Pacific Quality Health. The Quality Award is the highest honor given by Mountain-

NEW!

Compiled by Tasha Anderson Pacific, and Alaska Regional is the sole Anchorage hospital to have received this award in 2015. This award was given in recognition of Alaska Regional’s performance in improving care processes for six national quality projects: heart attack, heart failure, stroke, pneumonia, surgical care improvement, and venous thromboembolism. alaskaregional.com Credit Union 1 donated $7,800 to WISH (Women in Safe Homes) in January. During Credit Union 1’s annual Member Appreciation event at its Ketchikan branch, $3,900 was raised through a silent auction, and that amount was matched dollar for dollar by Credit Union 1. cu1.org The Alaska Chapter of the American Society of Interior Designers announced the recipients of its 2015 Design Excellence Awards, recognizing excellence in interior design. Honor awards go to the Boney Courthouse Remodel and Addition in Anchorage by Dana Nunn of Kumin Associates, Inc. and the Glenn Massay Theater in Palmer, also

by Nunn of Kumin Associates. Merit Awards were awarded to the 6th Floor Tenant Improvement in Anchorage by Natasha Schmidt of RIM Design; the Katmai Oncology Group Integrative Services in Anchorage by Megan Taushek, also of RIM Design; and the Quyanna Care Center in Nome, by Nunn of Kumin Associates. asid-alaska.org Crowley Maritime Corporation’s David Ridge, director of marine operations, was presented with the 2014 Thomas Crowley award, the company’s highest honor, at a ceremony at the company’s Anchorage office. The exclusive employee recognition program was created in 1985 and recognizes employees who have aligned themselves closely with the company’s values, displaying outstanding performance, dedication, leadership, and initiative. crowley.com The Association of Fundraising Professionals Alaska Chapter honored the following Alaskans for their commitment to bring about lasting community change at the 2015 Alaska Philanthropy Day Awards: Pogo Mine | Sumitomo Metal Mining Pogo LLC— Outstanding Cooperation; 2 Friends, A Most Unusual Gallery— Outstanding Small Business; Diane Moxness—Outstanding Philanthropist; Diane Mucha—Outstanding Volunteer; William Scannell IV—Outstanding Youth; and Beth Johnson— Outstanding Professional. afpalaska.afpnet.org Apache Alaska received a prestigious Pinnacle Award for the logo design of its signature fundraising event, the Apache Rainbow Challenge. The Alaska Chapter of the American Marketing Association presented the award. MSI Communications of Anchorage designed the logo. apachecorp.com

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Mad Dog Graphx won eight honors in two recent international design competitions, the MarCom Awards and the Davey Awards. Mad Dog won six honors from the MarCom Awards, including Platinum for a logo designed for Identity, Inc.’s 1+1 Alaska program and for Mad Dog’s own recently redesigned website. Mad Dog won Gold for the design of last year’s annual reports for Anchorage Project Access and OTZ Telephone Cooperative of Kotzebue and for the 2014–15 concert season poster series for Alaska Youth Orchestras. Mad Dog also received an Honorable Mention for a logo update for Food Bank of Alaska. In addition, annual reports Mad Dog designed for The Alaska Community Foundation and FBA won Silver in the 2015 Davey Awards. thedogpack.com The Alaska Community Foundation awarded grant s totaling $253,890 to twelve organizations across Alaska. These grants were made through the Vocational Fund for Alaska’s Future, a grant program established by Rio Tinto and designed to help Alaskans, particularly those in rural Alaska, develop the skills needed to be competitive in the state’s resource-based economy. Applications were encouraged from Alaska nonprofits that focus on natural resource development training and skill-building, with a preference given to projects that benefit rural Alaska.

Alaska Fisheries Development Foundation—$30,000: The Alaska Fisheries Development, through collaboration with Maritime Works (MW) and the Alaska Process Industry Careers Consortium (APICC), will support programs that target career awareness and readiness.

Additionally, MW & APICC will begin to create a workforce investment strategy, based on the National Fund of Workforce Solutions model.

Alaska Native Justice Center—$8,500: The Alaska Native Justice Center provides an adult re-entry program, providing support and training to Alaska Native and American Indian people to successfully transition from incarceration to being a healthy member of the community.

Alaska Resource Education—$20,000: Alaska Resource Education will develop a 9-12 STEM-focused curriculum on Alaska’s energy and mineral resources and a UA accredited course to provide teachers with the tools to implement that curriculum.

AVTEC—Alaska’s Institute of Technology—$30,000: Technology upgrades will increase AVTEC’s ability to deliver structural and pipe welding training to Alaskans. This technology will increase the number of students who can participate in the training by at least 40% annually.

Alaska Native Tribal Health Consortium—$30,000: The Alaska Native Tribal Health Consortium is collaborating with the Alaska Vocational Technical Center to offer Sanitation Energy Efficiency

training for fifteen water plant operators living and working in rural Alaska. With this training, plant operators will learn how to safely and sustainably increase efficiencies in rural communities, with a goal of lowering the cost of these services to local residents.

Bristol Bay Regional CTE Program—$30,000: VFAF funds will support the Lake and Peninsula School District Career and Technical Education program’s offerings of welding, construction, heavy equipment and employability courses.

Lower Yukon School District—$10,000: The Lower Yukon School District (LYSD) will develop and deliver vocational education courses in culinary arts, custodial services/facilities management, and customer service to high school and junior high school students in ten schools throughout the borough. LYSD will partner with NANA Management Services to complete this training through job shadowing and on-the-job training. These skills can be applied across sectors and industries for immediate employability.

Prince of Wales Vocational and Technical Education Center—$16,390: The Prince of Wales Vocational and Technical Education Center will host a five day Construction Academy for twelve local residents. The Academy will focus on a combination of basic construction skills along with the soft skills required to help their students succeed across industries.

Renewable Energy Alaska Project—$15,000: REAP will work with industry partners to develop K-12 and post-secondary curricula about clean energy through mapping and integrations of existing programs.

University of Alaska Prince William Sound College $24,000: Prince William Sound College will expand offerings to include hands on training in simple construction, millwright, mineral, oil and gas skills, which can all lead to immediate employability across the state. These funds will leverage an ongoing Technical Vocational Education Program project at PWSC. Voyage to Excellence—Chugach School District—$20,000: The Voyage to Excellence School will offer a twelve day training to 24 high school students from around the state centered on career exploration in the natural resource development industries and employability skills.

Yuut Elitnaurviat—The People’s Learning Center, Inc.—$20,000: Ten Yukon-Kuskokwim Delta residents will learn the basics of welding and fabrication through Yuut Elitnaurviat’s project. In order to learn these hands-on skills, the students will produce a custom trailer for the Lower Kuskokwim School District.

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MAT-SU

EAT

SHOP

PLAY

STAY By Tasha AndersonBy Tasha Anderson

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he Matanuska-Susitna Borough, also known as the Mat-Su or locally as just “the Valley,” begins about thirty-five miles north of Anchorage. Mat-Su has several locations with exceptional views of Denali as well as many lakes and rivers. There are lodges, vacation cabins, and campgrounds throughout. The Valley offers the gamut of outdoor activities, including hiking, crosscountry and back-country skiing and snowboarding, snow machining, mushing, ice skating, fishing, boating, hunting, zip-lining, and camping.

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Joshua Cadzow passes Knik Hall in Mat-Su on the Iditarod Trail in the 2005 Junior Iditarod. © Jeff Schultz/AlaskaStock.com

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THEATRE

EAT

SHOP

PLAY 

STAY

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ear-round Alaskans participate in the performing arts.

Several communities have wearable art shows, where outfits are made out of found materials, duct tape, and glue more often than not. There are symphonies in Anchorage, Fairbanks, and Juneau.

Most of Alaska’s communities have performing arts troupes and theaters. The Alaska performing arts community often features local playwrights, allowing the audience access to Alaska’s creative minds and insight into what motivates Alaskans and drives Alaska.

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By Tasha Anderson

SHOP

STAY

PLAY

DESSERTS

EAT 

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ost people know the iconic “Baked Alaska” dessert, comprised of cake, meringue, and ice cream. Alaska’s restaurants, diners, and bakeries offer a huge range of sweet treats beyond the eponymous dessert. Alaska also offers several locally owned treat businesses offering high-end confectionary treats such as drinking chocolate, imported dark chocolate bars, and delicate truffles, caramels, and other candies.

© Heather A. Resz

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ACCESSORIES

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SHOP 

By Tasha Anderson

PLAY

STAY

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arch in Alaska isn’t quite spring, though the occasional Chinook might give that impression.

Heavy winter coats may be too warm and burdensome; a great way to keep warm as the state gains sunlight is through thoughtful accessories such as scarves and hats, which can be paired with sweaters or sweatshirts to stay warm without overheating.

Rent. Lease. Buy.

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Alaska Business Monthly | March 2016 www.akbizmag.com

PLAY 

SHOP MAR

New Neighbors, New Diseases?

Wildlife Health in a Changing Arctic

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Empty Bowl

is the annual 12 This spring fund raiser for Bean’s Café, a not-for-profit organization with the mission to feed the hungry and shelter the homeless. Purchasing a ticket allows the attendee to select one locally made and donated bowl to take home, as well as enjoy soup and cornbread.

Dena’ina Center, 11 a.m. to 2 p.m. beanscafe.org

Anchorage MAR

Anchorage Boat Show

The Anchorage Boat Show is Alaska’s largest boat show, dedicated to promoting boating safety and bringing the region’s consumer and commercial marine industry together for a weekend full of boating, fishing, and hunting. Sullivan Arena, Thursday 4 p.m. to 8 p.m.; Friday and Saturday 10 a.m. to 8 p.m.; Sunday 10 a.m. to 5 p.m. anchorageboatshow.com

3-6

MAR

Parade & Procession

Carol Wincenc returns to Anchorage for John Corigliano’s Pied Piper Fantasy Concerto for Flute & Orchestra, featuring a parade of young flutists.

Regarded by its composer as “such fun,” Carnival of the Animals features a procession of fourteen short, whimsical movements, each one representing an animal or group of animals. Anchorage Symphony Orchestra, 8 p.m. anchoragesymphony.org

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Join Caroline Van Hemert from the USGS Alaska Science Center as she discusses several recent disease outbreaks among wild birds as well as research on birds and mammals in the Alaska Arctic. Alaska Zoo, 7 p.m. to 8 p.m. adfg.alaska.gov

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Man of La Mancha is a stage musical based on Cervantes epic satiric novel “Don Quixote.” The story takes place in the late 16th century. Miguel de Cervantes (a tax collector, soldier, and author) and his assistant, Sancho, foreclose on a church that failed to pay its taxes. Thus, the two men are thrown into prison by the Spanish Inquisition. Pleading his case, Cervantes gives a dramatic defense by reenacting the story of Don Quixote of La Mancha.

Juneau Opera. juneauopera.org

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MAR

Mat-Su

18-20 Outdoorsman Show

The show includes a gun show, a free archery range for kids, a laser shooting range for all ages, 176 vendors, seminars and demonstrations, and a book signing. Menard Sports Center, Friday Noon to 7 p.m.; Saturday 10 a.m. to 6 p.m.; Sunday 10 a.m. to 5 p.m. chinookshows.com

MAR

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Spring Garden Conference & Reception

This is the 10th annual spring conference and reception for the Alaska Botanical Garden. The theme for 2016 is “Thyme for Gathering.” BP Energy Center, 8:45 a.m. to 6:30 p.m. akbot.org/events MAR

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“For the Birds” Auction Fundraiser

This is a fundraiser for the Bird Treatment Learning Center, a 501(c)(3) nonprofit organization dedicated to rehabilitating sick, injured, or orphaned wild birds and providing avian education programs to the public. Hotel Captain Cook. birdtlc.net

MAR-APR

Rapture, Blister, Burn

for a Pulitzer 31-24 Nominated Prize, this intensely funny play takes a look at gender politics and feminist ideas. Cyrano’s. Thursdays, Fridays, and Saturdays 7 p.m., Sundays 3 p.m. cyranos.org

Fairbanks MAR

3-5

Junior North American Championship Sled Dog Race

This dog mushing championship is for mushers ages two through eighteen, with a winning purse of $14,000. Morning Star Park. northpolechampionships.com/juniornorth-american-championship MAR

Festival of Native Arts

Festival of Native Arts 3-5 The provides cultural education and sharing through traditional Native dance, music, and traditional arts. fna.community.uaf.edu

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This bridal show has more than sixty vendors to help couples plan their special day. Westmark Fairbanks Hotel and Conference Center, 11 a.m. webcenter11.com/interiorwedding-showcase

Homer MAR

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The 23rd Annual Winter King Salmon Tournament sponsored by the Homer Chamber of Commerce. 6 a.m. to 8 p.m. homeralaska.org

Juneau MAR

scientist and US Geological Survey superintendent whose name is so prominent in Juneau. Mendenhall Glacier Visitors Center, 6:30 p.m. to 8 p.m. mendenhallglacier.net

Ketchikan MAR

Investigating the 1813 Wreck of the Neva

The Mousetrap

The Mousetrap is the longestrunning show of any type in the modern era and is known for its witty script and the murder mystery at its heart—a classical theatrical entertainment by a masterful author. Kayhi Auditorium, 7:30 p.m. ketchikanarts.org

4-5

Sitka MAR-APR

Arti Gras

Arti-Gras is a two-week celebration of arts events that takes place every spring. The event includes but is not limited to workshops, guest artists, a gallery walk, exhibitions, the Wearable Arts Runway Show & Extravaganza, a forty-eight-hour film fest, classes, and music. thinkartthinksitka.com

21-2

Winter King Salmon Tournament

25 Historian Jim Geraghty illuminates the life of the renowned www.akbizmag.com

Man of La Mancha

Wasilla

Fairbanks KTVF 2016 6 Interior Wedding Showcase

Juneau

5

MAR

MAR

STAY

Iditarod Start

“The Last Great Race” has its official start 10 a.m. at 4th Avenue and D Street in Downtown Anchorage. The Re-start takes place the following day in Willow, and the Awards Banquet takes place at the Nome Rec Center on March 20. iditarod.com

Anchorage

Compiled by Tasha Anderson

EVENTS CALENDAR MARCH 2016

EAT

Wasilla MAR

Equinox Film Festival

second Annual Equinox 25-26 The Women’s Film Festival is an international film festival showcasing women. Last years’ festival received more than four hundred submissions.

The opening reception of the festival is Friday night. Glenn Massay Theater, 6 p.m. Friday and 1 p.m. Saturday. glennmassaytheater.com R

March 2016 | Alaska Business Monthly

137

Business Events MARCH

MAR

SWAMC Annual Economic Summit

Hotel Captain Cook, Anchorage: Southwest Alaska Municipal Conference – 2016 Annual Economic Summit and Membership Meeting. The theme for this year’s annual summit, Making Our Own Way, highlights the need for our communities to pull together and make our way through these challenging fiscal times. swamc.org

2-4

MAR

2-6

Alaska Anthropological Association Annual Meeting

Sitka Fine Arts Camp, Sitka: The annual meeting includes workshops, an evening reception for information and registration, paper presentations, and an awards banquet, business meeting, and the Belzoni meeting. alaskaanthropology.org

MAR

9-12

Western Alaska Interdisciplinary Science Conference and Forum

UAF Bristol Bay Campus, Dillingham: The theme of the 2016 Conference is “Adaptation: Tides of Change.” seagrant.uaf.edu

MAR

10-13

Alaska Library Association Annual Conference

Westmark Fairbanks Hotel: AkLA is a nonprofit professional organization for the employees, volunteers, and advocates at academic, public, school, and special libraries of all sizes in Alaska, as well as library products and services vendors. akla.org/fairbanks2016

MAR

Arctic Science Summit Week

University of Alaska Fairbanks: Arctic Science Summit Week is the annual gathering of international organizations involved in Arctic research. assw2016.org/about

12-18 MAR

22-24

Alaska Tribal Transportation Symposium

Hilton Anchorage: The annual symposium is designed for tribal leaders, managers, and administrators and transportation staff; transportation and infrastructure professionals; federal and state representatives; and all those seeking to learn more about tribal transportation and transportation challenges in remote Alaska communities. attwg.org

MAR

26

AFCCA Annual Child Care Conference

BP Energy Center, Anchorage: The conference includes seven hours of training, and lunch is provided. alaskafcca.org

APRIL

APR

6-7

Governor’s Safety and Health Conference

Dena’ina Center, Anchorage: The Alaska Safety Advisory Council works with organizations to promote safety so that resources can be marshaled and used to reduce the menace of accidental death and injury. akgshc.com 138

Compiled by Tasha Anderson Annual Meeting and APRIL ASRT Educational Conference

8-9

Westmark Fairbanks Hotel: This annual event offers a single location for companies as well as Imaging Specialists from all modalities to network with the largest captive audience in Alaska. aksrt.com

Annual Conference APRIL AKMGMA This is the 30th anniversary of the

14-16

Medical Group Management Association Alaska conference, and the theme for 2016 is “Rock Stars of Practice Management.” akmgma.org

Alaska Native Studies Conference

APRIL University of Alaska Anchorage: This

15-16

year’s theme is “Wellness & Healing: Indigenous Innovations & Alaska Native Research.” alaskanativestudies.org

Annual Statewide APRIL AWWMA Conference

18-21

Anchorage: This is a venue to bring information, technology, expertise, curiosity, hunger, and thirst (for refreshment and knowledge) to the Water and Wastewater Industry Professionals in Alaska. awwma.org

Annual Behavioral Health APRIL Alaska Provider Education Conference

26-28

BP Energy Center, Anchorage: Topics for this year’s conference include care and coordination of discharge planning, State of Alaska behavioral health initiatives update, and unique and diverse Alaska cultural considerations. qualishealth.org

Alaska Spring Conference APRIL NEA NEA Alaska, an affiliate of the

22-24

National Education Association, is an organization with over twelve thousand members who work in Alaska’s public schools. neaalaska.org

Spring Specialty Conference: APRIL AWRA Water-Energy-Environment

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

MAY

Westmark Fairbanks Hotel: The Alaska Credit Union League’s annual meeting is an opportunity to gather, network and learn. alaskacreditunions.org/events.html

19-21

JUNE Optometric Association JUNE Alaska Summer CE Conference

2-5

Land’s End Resort, Homer: The mission of the AKOA is to influence the future of eye care by ensuring the welfare of Alaskans and promoting the continued development of the profession of optometry. akoa.org

Annual Conference JUNE CSTE Anchorage: The conference connects

19-23

more than 1,400 public health epidemiologists from across the country and will include workshops, plenary sessions with leaders in the field of public health, oral breakout sessions, roundtable discussions, and poster presentations. csteconference.org/2016

Foundation Alaska JUNE Southcentral Conference

20-24

Anchorage: Southcentral Foundation’s mission is to work with the Native Community to achieve wellness through health and related services. southcentralfoundation.com

JULY Business Week JULY Alaska Alaska Pacific University, Anchor-

16-23

age: Alaska Business Week is a oneweek summer program teaching the basic principles of private sector business to Alaskan high school students. alaskachamber.com

25-27

Sheraton Anchorage: Topics include energy-oil and gas, energy-coal, energyhydropower, water supply and energy management, environment, and communications. awra.org/meetings/Anchorage2016

Rural Energy Conference APRIL Alaska Westmark Fairbanks Hotel: The

26-28

Alaska Rural Energy Conference is a three day event offering a large variety of technical sessions covering new and ongoing energy projects in Alaska, as well as new technologies and needs for Alaska’s remote communities. alaskarenewableenergy.org

MAY

MAY

11-13

Alaska Bar Convention

ACUL Annual Meeting

AUGUST

AUG

ICETECH 16

AUG

Aleutian Life Forum

Hotel Captain Cook, Anchorage: The Arctic Section of the Society of Naval Architects and Marine Engineers together with Alaska’s Institute of the North is now well on the way to staging the premier international conference on ships and structures in ice. icetech16.org

15-18

Unalaska: Aleutian Life Forum is a conference gathering of national, state, and regional scientists; industry stakeholders; community leaders; and local knowledge to promote resilient coastal communities. aleutianlifeforum.com

16-20

Dena’ina Center, Anchorage: This conference provides opportunities to

Alaska Business Monthly | March 2016 www.akbizmag.com

ALASKA TRENDS

By Iuliia Chepurko

Housing Construction in Alaska: Keeping up with population growth?

A

ll across Alaska, many communities are faced with severely overcrowded housing markets, making home construction a key recurring issue impacting the state economy.

Based on the Alaska Housing Finance Corporation Housing Assessment report, there are significant needs: more than fifteen thousand homes are overcrowded or severely overcrowded, more than seventyfive thousand homes are cost-burdened, and nearly twenty thousand homes use large amounts of energy. Ideally, these homes need to be replaced, but in practice housing construction cannot meet immediate needs. In addition to the current housing shortage, Alaska’s population is growing.

Looking at the population by economic region, the Anchorage and Mat-Su Region contains about 54 percent of residents and is by far the most densely populated region in Alaska. About 68 percent of all housing built in 2014 was constructed in this region (based on Alaska Housing Indicators report prepared by the Alaska Housing

Finance Corporation). On average, this region has the highest share of cost-burdened or non-affordable houses, leading about 34.5 percent of households to spend more than 30 percent of total household income paying for a place to live.

The Southeast economic region has the second highest number of houses built in 2014 (218 houses or 16 percent) and has the fourth largest population in Alaska. About 27.6 percent of housing does not fit the affordability criteria, and 4 percent is overcrowded. Looking at the last seven years of data available, Southeast Alaska housing construction has a strong correlation with population growth. In other words, the number of houses built keeps pace with the number of people living in the region.

Contrary to Southeast Alaska, the Interior region has the second largest population in the state (about 15 percent of the total) but takes fifth place in the number of houses built in 2014 (only 3 percent of the total). In addition, it is one of the regions where housing construction does not fol-

low trends in population changes: there is no connection between population growth and housing construction. Of Interior housing units, 24.6 percent are cost-burdened, which is considered high, and 8.6 percent are overcrowded.

At the state level, housing construction mirrors population growth, both of which have upward trends. According to the Housing Assessment report, about one in three households in Alaska are not affordable (31 percent). Of these cost-burdened households, about 3,580 are both overcrowded and cost-burdened. The analysis shows that the housing situation is better in Southeast, as well as the Anchorage and Mat-Su regions, than the rest of the state.

Still, addressing the lack of affordable housing is a key challenge statewide. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

Sources: 2014 Alaska Housing Assessment by Alaska Housing Finance Corporation, Population Estimates by Alaska Department of Labor and Workforce Development

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139

ALASKA TRENDS

Indicator

GENERAL Per Capita Personal Income – Alaska Per Capita Personal Income – US Consumer Prices – Anchorage Consumer Prices – US Bankruptcies Alaska Total Anchorage Total Fairbanks Total Labor Force in Alaska Unemployment Rate Alaska United States Employment Alaska Anchorage/Mat-Su Region Anchorage, Municipality Interior Region Fairbanks North Star Borough Southeast Juneau, City and Borough Northern Region Gulf Coast Southwest Region Sectorial Distribution – Alaska Total Nonfarm Goods-Producing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Service-Providing Trade, Transportation, Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business Services Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Services & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government PETROLEUM/MINING Crude Oil Production – Alaska 140

By Iuliia Chepurko Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

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

3rdQ15 3rdQ15 1stH15 1stH15

56,768.0 48,051.0 217.1 236.3

56,422.0 47,537.0 216.8 237.1

54,169.0 46,255.0 214.8 236.4

4.8% 3.9% 1.1% 0.0%

Number Filed Number Filed Number Filed Thousands

December December December December

24.0 18.0 4.0 357.9

37.0 27.0 7.0 358.6

28.0 21.0 2.0 362.5

-14.3% -14.3% 100.0% -1.3%

Percent Percent

December December

6.6 5.0

6.4 5.0

6.4 5.6

3.1% -10.7%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

December December December December December December December December December December

334.0 194.9 153.8 48.7 43.8 32.4 15.8 9.9 33.8 14.3

334.0 193.8 152.9 49.3 44.3 32.6 15.9 10.2 34.6 15.6

339.0 196.0 154.6 49.9 44.8 33.1 16.0 10.6 34.8 14.5

-1.5% -0.6% -0.5% -2.4% -2.2% -2.1% -1.3% -6.6% -2.9% -1.4%

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

325.0 40.2 16.6 16.5 13.5 16.7 6.9 3.1 284.8 66.9 6.4 38.9 6.4 10.5 21.6 5.7 6.2 4.4 11.9 26.9 48.6 34.5 30.3 7.1 19.0 12.3 81.7 14.4 25.1 8.1 42.2 23.8 3.7

324.9 42.0 16.8 16.6 13.9 17.0 8.2 4.4 282.9 65.9 6.4 38.7 6.3 10.4 20.8 5.6 6.2 4.4 12.0 26.9 47.6 34.1 30.7 7.4 19.1 12.2 81.4 14.1 25.3 8.1 42.0 23.8 3.7

324.9 49.3 17.5 17.4 14.8 16.3 6.9 3.1 284.2 64.2 6.3 37.1 6.1 10.3 20.8 5.7 6.2 4.2 12.4 28.4 47.5 34.0 30.6 8.1 18.6 11.6 83.3 14.7 26.7 8.6 41.9 23.8 3.8

0.0% -18.5% -5.1% -5.2% -8.8% 2.5% 0.0% 0.0% 0.2% 4.2% 1.6% 4.9% 4.9% 1.9% 3.8% 0.0% 0.0% 4.8% -4.0% -5.3% 2.3% 1.5% -1.0% -12.3% 2.2% 6.0% -1.9% -2.0% -6.0% -5.8% 0.7% 0.0% -2.6%

Millions of Barrels

December

16.1

15.7

15.9

1.3%

Alaska Business Monthly | March 2016 www.akbizmag.com

ALASKA TRENDS

Indicator

By Iuliia Chepurko

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Natural Gas Field Production -- Alaska Billions of Cubic Ft. December 8.5 8.0 8.8 ANS West Coast Average Spot Price $ per Barrel December 37.1 44.2 60.9 Hughes Rig Count Alaska Active Rigs December 11.0 12.0 10.0 United States Active Rigs December 698.0 744.0 1,840.0 Gold Prices $ Per Troy Oz. December 1,062.2 1,068.3 1,199.3 Silver Prices $ Per Troy Oz. December 13.8 14.1 16.0 Zinc Prices $ Per tonn December 1,521.7 1,582.0 2,072.3 REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Government Statewide Average Housing Market Loan Single-Family Condominium Multi-Family Refinance Average Loan Statewide Single-Family Condominium New Housing Built Statewide Single-Family Mobile Home Multi-Family

Year Over Year Change

-3.4% -39.1% 10.0% -62.1% -11.4% -13.5% -26.6%

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

December December December December

50.1 14.5 32.3 3.1

30.4 10.0 11.1 9.1

37.1 4.5 12.7 19.9

35.0% 222.2% 154.3% -84.4%

Dollars Dollars Dollars

3rdQ15 3rdQ15 3rdQ15

287,606.0 190,451.0 458,177.0

287,989.0 184,829.0 481,798.0

275,533.0 181,196.0 416,167.0

4.4% 5.1% 10.1%

Dollars Dollars

3rdQ15 3rdQ15

229,493.0 149,952.0

233,422.0 163,474.0

225,858.0 168,485.0

1.6% -11.0%

Units Units Units

3rdQ15 3rdQ15 3rdQ15

186.0 19.0 97.0

228.0 67.0 120.0

220.0 37.0 237.0

-15.5% -48.6% -59.1%

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

Thousands Thousands

December December

197.6 42.6

365.4 76.3

389.14 76.53

-49.2% -44.3%

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 $

November* November* November* November* November* November* November*

52,622.3 53,272.7 28.4 48.7 -67.6 0.4 -89.0

52,544.0 53,701.3 113.4 1,973.7 23.7 236.1 1,382.0

51,610.8 52,342.2 234.2 442.2 30.8 -13.2 235.6

2.0% 1.8% -87.9% -89.0% -319.5% 103.0% -137.8%

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

3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15

6,340.2 378.4 148.2 2,970.6 20.4 5,515.1 4,717.2 2,097.1 2,620.1

6,340.2 378.4 148.2 2,970.6 20.4 5,515.1 4,717.2 2,097.1 2,620.1

5,781.7 299.4 146.7 2,742.9 18.0 5,002.3 4,346.6 1,830.3 2,516.3

9.7% 26.4% 1.0% 8.3% 13.5% 10.3% 8.5% 14.6% 4.1%

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

December December December December December

121.7 1.4 0.7 0.9 6.4

122.5 1.3 0.7 0.9 6.4

119.5 1.2 0.6 0.8 6.1

1.8% 18.7% 4.2% 13.2% 5.1%

Notes: 1. Visitor Industry - December data not available, November data kept. 2. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska. 3. Information on housing is retrieved from AHFC website. *December data was not available in time for publication, November data has been kept.

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March 2016 | Alaska Business Monthly

141

ADVERTISERS INDEX Advanced Physical Therapy of Alaska.17 AE Solutions Alaska LLC....................... 116 AirSide Solutions Inc..............................121 Alaska Dreams Inc....................................63 Alaska Logistics......................................106 Alaska Rubber........................................... 48 Alaska Traffic Company..........................27 Alaska USA Federal Credit Union........59 Alaska USA Insurance Brokers..............69 American Marine / Penco....................139 Anchorage Chrysler Dodge.................. 135 Anchorage Opera....................................134 Anchorage Sand & Gravel.....................30 ARCADIS.....................................................23 Arctic Office Products...........................84 Associated Builders & Contractors......45 Avis Rent-A-Car.......................................136 Bristol Bay Native Corp..........................99 Business Insurance Associates Inc.......49 C & R Pipe and Steel Inc.........................81 California Coast University...................90 Calista Corp..............................................114 Carlile Transportation Systems............. 13 Catalyst Marine Engineering.................76 CH2M.........................................................123 Colville Inc.................................................111

Conam Construction Co.........................19 Construction Machinery Industrial........2 Craig Taylor Equipment...........................54 Crowley Alaska Inc................................ 103 Cruz Construction Inc.............................57 Davis Constructors & Engineers Inc....16 Delta Leasing LLC.....................................65 Denali General Contractors...................29 Diamond Airport Parking.......................70 Donlin Gold................................................41 Doyon Limited............................................. 3 Everts Air Cargo Tatonduk Outfitters...........................19 Fairweather LLC.....................................104 First National Bank Alaska....................... 5 Fountainhead Hotels...............................43 GCI..................................................... 111, 144 Global Services Inc................................ 124 Greer Tank.................................................70 Holmes Weddle & Barcott....................30 Hot Wire LLC............................................. 61 Hotel Captain Cook................................. 89 JP Construction/ Alaska Concrete Polishing..................... 46 Judy Patrick Photography................... 142 Landye Bennett Blumstein LLP............ 82

Lynden Inc...................................................85 Matson Inc............................................... 107 MFCP Motion & Flow Control Products Inc..........................41 MICROCOM...............................................95 Motive Power Marine.............................115 N C Machinery............................................11 Nalco Energy Services.......................... 124 NCB............................................................. 94 Nortech Environmental & Engineering...................................... 46 Northern Air Cargo...................... 128, 129 Olgoonik Corp............................................97 Olympic Tug & Barge............................109 Pacific Coast Maritime.........................109 Pacific Pile & Marine............125, 126, 127 Parker Smith & Feek................................ 71 PenAir..........................................................55 Personnel Plus................................134, 143 Port of Nome..........................................109 Price Gregory International Inc.............49 Quality Asphalt Paving............................47 Ravn Alaska................................................75 RSA Engineering Inc.................................16 Ryan Air.......................................................66 Samson Tug & Barge................................45

Span Alaska Transportation Inc............ 51 Spenard Builders Supply A Probuild Company..........................37 Stellar Designs Inc..................................136 T. Rowe Price..............................................79 The Plans Room.........................................43 Think Office................................................96 TOTE Maritime Alaska.............................77 Turnagain Marine Construction............47 Tutka LLC................................................... 48 UA Local 367 Plumbers & Steamfitters......................................62 UIC Arctic Response Services..............117 UIC Commercial Services...................... 64 UIC Marine Services................................67 Vigor Alaska.............................................105 Visit Anchorage.........................................91 Voyager Inn................................................90 Washington Crane & Hoist....................83 Waste Management.................................18 Watterson Construction.........................39 Wells Fargo Bank Alaska.........................73 Yukon Equipment Inc............................... 15

AVAILABLE NOW! A COFFEE TABLE PHOTO BOOK OF ALASKA’S NORTH SLOPE OIL PATCH

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142

Alaska Business Monthly | March 2016 www.akbizmag.com