December 2011 - Alaska Business Monthly by Alaska Business

SPECIAL SECTION: Philanthropy in Alaska

Giving

From the

Heart Begins on Page 64

DECEMBER 2011 TA B L E O F C O N T E N T S

D E PA R T M E N T S From the Editor . . . . . . . . . . . . . . 6 Inside Alaska Business . . . . . . . . 8 Right Moves . . . . . . . . . . . . . . . . 22 Market Squares . . . . . . . . . . . . . 74 Alaska Trends . . . . . . . . . . . . . . . 95 Ad Index . . . . . . . . . . . . . . . . . . . 98 R E G U L A R F E AT U R E S

View From the Top 11 | Larry Rannals, President Tri-Star Distributing Compiled by Peg Stomierowski Associations 20 | Alaska Travel Industry Association Creating jobs, strengthening families, increasing revenue

ABOUT THE COVER This issue premiers the first annual Philanthropy Special Section, featuring articles on mobile giving, corporate giving, the invisible sector of nonprofits and much more. We plan to run a similar section each December, giving praise to those who give, and ideas for giving for those who want to but aren’t familiar with organizations and what they do. Photo ©2011 Kevin G. Smith/AlaskaStock.com

ARTICLES

Alaska Native Business 12 | Bridging the Gap New management team strengthens ASRC

By Julie Stricker

64 | Philanthropy in Alaska Businesses giving back to the community

Alaska Native Business 16 | Native Partnerships

By Tracy Barbour

Best of both worlds

By Julie Stricker

By Tracy Barbour Towns in Transition 48 | Juneau Alaska’s capital city faring well

By Tracy Barbour Ripe for Redevelopment 56 | Redeveloping an Anchorage Community Mountain View business district forges a new future

By Gail West

Philanthropy SPECIAL SECTION

Oil & Gas 24 | Preventing Blowouts

Drilling safety top priority in state

By Mike Bradner Construction 30 | Associated General Contractors Names 2011 Award Winners Top construction projects and safety recognition

70 | The Invisible Nonprofit Sector Employs many, spends money in communities they serve

By Tracy Barbour 76 | Mobile Donations Come to Alaska Text and give

By Ken Miller

General 34 | Top Alaska Business Stories of 2011 From oil to film, from wind energy to tourism

By Vanessa Orr Transportation 42 | Container Shipping

Alaska’s consumer lifeline

By Susan Sommer Alaska This Month 60 | Swedish Christmas Tours Revisit Bygone Era Oscar Anderson House hosts guided holiday event By Nancy Pounds HR Matters 62 | Truth or Consequences, Alaska

Transportation SIDEBAR 44 | Malcom McLean

78 | Pick Click Give Time to think about giving in the new year

By Peg Stomierowski

The father of containerization

Telecom & Technology

By Susan Sommer

SPECIAL SECTION

Health & Medicine 52 | Alaska’s Hospitals Rise to Their Challenges

Honesty best policy for references

Mission statements show vision for Alaska’s growing health needs

By Dr. Lynne Curry

By Deborah Jeanne Sergeant

83 | Social Media Strategy Follow the 6 P’s for successful outreach

By Ross Johnston 86 | Telecommunications & Technology Directory

www.akbizmag.com • Alaska Business Monthly • December 2011

and

Volume 27, Number 12 Published by Alaska Business Publishing Co. Anchorage, Alaska Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF Debbie Cutler Susan Harrington Candy Johnson Linda Shogren Chris Arend Judy Patrick Azimuth Adventure Photography

BUSINESS STAFF President Vice President Sales & Mktg. Account Mgr. Account Mgr. Traffic Coordinator Accountant

Jim Martin Charles Bell Anne Campbell Bill Morris Ann Doss Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial e-mail: editor@akbizmag.com Advertising e-mail: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., P.O. Box 241288, Anchorage, Alaska 99524; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2011, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues $3.95 each; $4.95 for October. Back issues $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, P.O. Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change. Manuscripts: Send query letter or manuscripts 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 Monthly is prohibited. Address requests for specific permission to the Editor, Alaska Business Monthly. Online: Alaska Business Monthly is available online from Data Courier and online from Thomson Gale. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

THE

DITOR

A Christmas Tale

Managing Editor Associate Editor Art Director Art Production Photo Consultant Contributing Photographers

ROM

A story featuring Alaska fishermen and women, and the creatures of the sea

t’s not unusual for a writer at Alaska Business Monthly to publish a book. For example, Jody Ellis-Knapp, who has written many articles over the years, published “Ghosts of Alaska.” And freelancer Susan Stark Christianson, a writer for ABM since before my time, wrote “Women’s Voices: The Wisdom of the Grandmothers.” We are proud of all our freelancers turned book writers, just as we are of our latest success story: ABM writer Will Swagel of Sitka who is author of a children’s book titled “The Bight … Before Christmas.” “We actually sell more to adults for adults,” laughs Swagel. That’s because this storybook, which is illustrated by Fairweather Prints art gallery owner and artist Colin Herforth, is all about fishing and Christmas, using nautical terms that provide joy for children and learning opportunities for all ages. It is especially well received by those in the commercial fishing industry. It birthed out of a dream, where Santa visited a guy on a fishing vessel for Christmas. “Santa has to be there, too,” said Swagel. “Santa goes everywhere.” Swagel found Herforth by running a classified ad asking for an illustrator who had a “wry” or “pumpernickel” sense of humor. The longtime acquaintance quickly answered. “I didn’t expect someone of his caliber,” said Swagel. Herforth is a talented artist who worked on the project for a year and came up with the 18 original water color paintings used in the book. Fairweather Prints is named after the Fairweather fishing grounds in Southeast and a lot of Herforth’s art is of the fishing fleet and fishermen. In fact, Herforth was a former deckhand.

FISH TO RICHES

Swagel’s story is a different one than other ABM writer/authors. He didn’t set out to write a book. He started as the columnist of “Our Town,” which comes out in the Sitka Soup every other week (www.sitkasoup.com). Each Christmas for the five years or so before the book came out, Swagel published his Christmas story, a take-off of The Night Before Christmas, in word form.

It went virall – att least l t iin Sitk Sitka. PPeople l were sending copies to friends and family, they were doing plays based on Swagel’s fishy Christmas words, promoting it at fundraisers, reading it to students in classrooms, talking about it. “There was a great outpouring of affection; it was fantastic,” said Swagel. “I was really inspired by the great fishing community in Sitka.” The book, featuring a variety of common North Pacific sea creatures was published just before Thanksgiving 2009 and nearly 1,000 were sold in Sitka, out of a population base of about 9,000. The second year in print Swagel branched out to Juneau and Ketchikan. This year it’s going to the Lower 49 through marketing efforts of Swagel and his wife Suzanne Portello.

ON THE ROAD

When she was in graduate school, Suzanne brought some books to Gloucester, Massachusetts – a fishing community where The Perfect Storm was filmed. It was an instant success. In mid-October Swagel took the book on the road. “I went down the coast as far as Eureka, California,” he said. “To all the fishing communities. Got a delighted response on the road. They said ‘there isn’t enough about us,’ meaning fishermen and fishing life.” Assisting with production of the book was Hannah Portello-Swagel, Suzanne Portello, Rachel Ramsey and D.J. Robidou. Also noteworthy is the instate printer Alaska Litho of Juneau, which allowed it to be a Made in Alaska product. “We proudly put the Made in Alaska polar bear on every cover,” says Swagel. Individuals can buy the book at bookstores, gift shops and marine suppliers throughout Alaska, which are listed on the book’s website in www.thebightbeforechristmas.com. The book is also available at amazon.com. “This has been just a very organic situation,” said Swagel. “We got so much encouragement from the community to do this. There’s tremendous motivation in knowing you have this kind of support. Even though it started here in Sitka, we’ve actually got something. We’ve sold a bunch of books.” – Debbie Cutler Managing Editor

www.akbizmag.com • Alaska Business Monthly • December 2011

RESPONSE

R E C OV E R Y

R E S TO R AT I O N

Bell Tech Inc. specializes in spill response and eco-recovery. Our services include the response, recovery and restoration as it relates to marine and land based oil spill decontamination. With over 24 years of experience ranging from the Exxon Valdez to the Deepwater Horizon Incidents Bell Tech has cleaned more contaminated vessels than anyone in the world. The patented Bell-Vac System that is used to facilitate the decontamination is unlike any other process as it is capable of 100% contaminant capture and recovery.

OUR ECO-FRIENDLY SERVICES INCLUDE BUT ARE NOT LIMITED TO:

Consulting and Contracting Phase I and II Environmental Assessment On-site Marine, HAZMAT and OSHA Training Arctic Ice and Frozen Tundra Recovery River & Stream Spill Recovery and Restoration

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BERTHS

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Bell Tech received the Green award in 2009, 2010 and 2011 for designing environmentally safe procedures for use during all phases of oil spill cleanup.

belltechconsultants.com 1-800-537-6949 Bell Tech Inc.

537 Egan St.

P.O. Box 3467

Valdez, AK 99686

INSIDE ALASKA BUSINESS Challenge Alaska Seeks Ski School Volunteers

hallenge Alaska is recruiting volunteer ski and snowboard instructors for the 2011-2012 season, which runs through April 15. The ski school operates at Alyeska Resort’s Challenge Alaska Building in Girdwood. Challenge Alaska Adaptive Ski and Snowboard School was founded in 1995. Each season, more than 100 volunteers help run the ski school. Adaptive ski and snowboard training is provided at the beginning of the season and continues through April. Volunteers can participate with flexible schedules and earn credit toward discount lift tickets. Challenge Alaska is a Disabled Sports USA chapter and a Professional Ski Instructors of America member school. To volunteer, contact Challenge Alaska at challenge.ski@alaska.net or call 907-783-2925. For more information, visit www.challengealaska.org.

Providence Alaska Medical Center Garners Honor

he American Heart Association honored Providence Alaska Medical Center in Anchorage for providing the outstanding care for stroke patients. Providence was honored for using The American Heart Association/American Stroke Association’s Get With The Guidelines program. Providence was listed with 814 other hospitals in a special ad in the “America’s Best Hospital’s” August issue of U.S. News & World Report. Honorees received the Get With

The Guidelines Gold Performance Achievement Award. A total of 961 awards were given for achievement in coronary artery disease, stroke or heart failure treatment. Get With The Guidelines is a hospitalbased quality-improvement program designed to ensure that hospitals consistently care for cardiac and stroke patients following the most up-to-date guidelines and recommendations. Currently, more than 1,400 hospitals participate in the program.

Denali Alaskan Home Loans Earns Award

enali Alaskan Home Loans received the U.S. Commerce Association’s 2011 Best of Anchorage Award in the mortgages category. The New York City-based group’s award program recognizes outstanding local businesses nationwide, which enhance a positive image of small business through customer and community service. The association is funded by local businesses operating in U.S. towns and cities. Denali Alaskan Home Loans is part of Denali Alaskan Federal Credit Union. The Anchorage-based mortgage company has an office in Wasilla.

State Chooses Metlakatla Road as Scenic Byway

he State Department of Transportation and Public Facilities designated Walden Point Road in Metlakatla as a scenic byway. The 14-mile road in

COMPILED BY NANCY POUNDS Southeast Alaska is located on Annette Island Reserve, the only Alaska Native Reservation in the state. A ceremony was conducted in August. State officials believe the area could be a visitor destination, especially for hikers, and new small businesses from the Metlakatla Indian Community could serve the potential visitor industry. Alaska’s Scenic Byway designation provides funds to the byway communities to create travel experiences and enhance local quality of life through efforts to preserve, protect and interpret the designated scenic byway. “This region is full of rich history and culture,” said DOT&PF Commissioner Marc Luiken. “It also showcases the only Native reservation in Alaska. The history, natural abundance and recreational opportunities set this corridor apart and make it a unique place.”

Cook Inlet Council Earns Federal Recertification

ook Inlet Regional Citizens Advisory Council has successfully completed the recertification process from the U.S. Coast Guard. The recertification is federally required for the group, which was created as part of the 1990 oil tanker and terminal oversight law. The Coast Guard’s letter announced recertification in September. The council, formed after the 1989 Exxon Valdez oil spill, created partnerships between Alaskans, State and federal agencies and industry representatives on oil exploration, development and production. The council represents Cook Inlet area residents’

www.akbizmag.com • Alaska Business Monthly • December 2011

INSIDE ALASKA BUSINESS interests while promoting environmentally safe marine transportation and oil facility operations in Cook Inlet.

Patrick Mechanical Inc. News

he Aleut Corp. acquired Patrick Mechanical Inc. of Fairbanks in late September. Patrick Mechanical designs and builds heating, ventilation and air conditioning systems. The company, founded in 1994, has 48 employees. Current projects include the University of Alaska Fairbanks Life Sciences Building, Tanana Chiefs Conference Ambulatory Healthcare Center and Fort Wainwright Barracks 336B, Phase I. “PMI represents a great addition to our Industrial Services line of business here in Alaska,” said Dave Gillespie, The Aleut Corp. chief executive. “It is a solid cash-flow generator that will help us continue to provide dividends for our shareholders. We’re also pleased that Mike Patrick, president, and Dave Peet, vice president, have both agreed to stay on with us to continue to run the company.”

Alaska Ship and Drydock Selected as General Contractor for New Ferry

he State Department of Transportation and Public Facilities chose Alaska Ship and Drydock of Ketchikan as construction manager and general contractor for the new Alaska Class ferry. Alaska Ship and Drydock will work to finish the ship’s design with the transportation department and Elliott

Bay Design Group, the architect and engineering contractor. Once the design is complete, ASD will be given the first opportunity to negotiate a contract for construction of the vessel. Alaska Ship and Drydock operates the Stateowned Ketchikan Shipyard. “By participating in the design, ASD will have thorough knowledge of the vessel and what it will take to construct it,” said DOT&PF Commissioner Marc Luiken. “ASD can then submit a bid to build the vessel. This puts ASD in a partnership with the State, an arrangement that should limit costly change orders and cost overruns. The new process fulfills our responsibility to maximize the value of public funds while providing an opportunity for economic development and jobs in Alaska.”

Alaska USA Garners Visa Service Award

laska USA Federal Credit Union received the 2010 Visa Global Service Quality Performance Award. The Alaska company was honored with the global award for Highest Chargeback Effectiveness Rate. The awards recognize companies providing consistent, superior performance and continued service improvements for cardholders. Chargebacks include identifying and addressing transaction processing improvements, training merchant sales staff on proper card acceptance procedures and educating back-office staff on operating regulations related to exception processing. Visa selected Alaska USA for the Highest Chargeback Effectiveness Rate award based on the

efficiency in processing exception items and lowest percentage of chargebacks returned as representments, as well as Alaska USA’s successful evaluation of potential chargebacks, processing them only once and using the correct chargeback reason codes.

GeoNorth Buys Motznik Information Services

eoNorth LLC has acquired Motznik Information Services, a longtime Alaska-based firm. Motznik, which was founded in 1974, provides an online database subscription service allowing clients to search multiple databases containing Alaska’s public records. The company also specializes in providing national background screening, targeted mailing lists, and other specialized data and marketing services. GeoNorth officials believe the acquisition will strengthen its sister company, Public Knowledge Systems, the provider of another database subscription service know as ingens.com. Both firms serve attorneys, title companies, real estate agents, advertising and public relations agencies, government agencies and others. Ingens and Motznik employees will work at the main Anchorage office. GeoNorth is a subsidiary of The Tatitlek Corp.

Northrim Listed with Other Top U.S. Banks

orthrim BanCorp Inc. was listed in the Sandler O’Neill and Partners Bank and Thrift Sm-All Stars - Class

www.akbizmag.com • Alaska Business Monthly • December 2011

INSIDE ALASKA BUSINESS of 2011. Sandler O’Neill has identified Northrim as one of the 25 topperforming, publicly traded small-cap banks and thrifts in the nation. Northrim officials report the company is the only bank based in the Pacific Northwest to earn this honor. Northrim was recognized from a field of 486 publicly traded banks and thrifts in the U.S. with market capitalizations less than $2 billion. “It is an honor to be recognized by Sandler O’Neill for our performance over the past year,” said Marc Langland, Northrim’s chairman, president and chief executive. “Sandler O’Neill is a well-respected source of research for community banks, and our placement on their Sm-All Star list reflects the hard work of all of our employees.” Sandler O’Neill is an investmentbanking firm to the financial industry.

The Aleut Corp. Buys Fairbanks Key4Women Raises Funds for AWAIC

eyBank’s annual Key4Women forum in Anchorage raised $6,000 for the Abused Women’s Aid in Crisis shelter. About 270 people attended the event, conducted Sept. 30 at Dena’ina Civic & Convention Center. Each year event organizers donate registration fees from the luncheon to an Anchorage nonprofit organization. This year’s event topped expectations for participants and funds raised. National leadership specialist Cindy Solomon described types of courage needed for business success in a challenging economy. Founded in 2005, Key4Women helps women in business achieve their

goals by providing access to capital, customized service, networking events and educational opportunities.

stance-related disorders, and Alzheimer’s disease and related dementia. A prospectus and application form can be found at www.mhtrustland.org.

BP Donation Supports New Seward Library Project

P Exploration (Alaska) Inc. donated $50,000 to the new Seward Library museum project. Construction of the library should be completed in 2012. The 16,300-square-foot facility will feature high-tech library and museum services for Seward residents. The library building committee has worked four years on the project’s financial plan.

Chickaloon Lease Offered for Coal Development

he Alaska Mental Health Trust Authority offered 11,487 acres for lease near Chickaloon for coal exploration and development. Applications are due Dec. 16, and a successful applicant will be chosen Dec. 30. The Mental Health Trust Land Office, a division of the Department of Natural Resources, is managing the lease offering. The division is responsible for managing nearly 1 million acres in the Alaska Mental Health Trust. State officials believe the tract contains high-quality bituminous coal. Rental payments and royalties from future mining on the land will fund programs and services for Trust beneficiaries, who include people with mental illness, developmental disabilities, chronic alcoholism and other sub-

Fairbanks Group Tallies Fundraising Success

he Fairbanks chapter of the American Heart Association was ranked first in the nation for revenue generated from its Heart Walk and Go Red For Women events in small metropolitan statistical areas. The honor is based on a national benchmarks report that compared fundraising success in all American Heart Association markets. Fairbanks was ranked first in 10 categories in the report. The 2010 Fairbanks Heart Walk raised more than $257,000. The event had the highest fiscal revenue for events in similar markets and the highest event growth, highest fundraising by a participating company and the most money raised online via the event Web site. The 2010 Fairbanks Go Red For Women Conference and Luncheon raised $156,336, which was the highest fiscal revenue for events in similar markets. The event also had the highest revenue from donations made by event attendees during the Open ❑ Your Heart segment.

To submit to Inside Alaska Business, send your press release via e-mail to editor@akbizmag.com.

www.akbizmag.com • Alaska Business Monthly • December 2011

VIEW

FROM THE

TOP

COMPILED BY PEG STOMIEROWSKI

Larry Rannals, President

Tri-Star Distributing

arry F. Rannals founded Tri-Star Distributing in Anchorage Nov. 2, 1981, with partner Sam Harris. The duo, who’d worked together at another distribution company, started the firm from scratch using funds from their home equity loans, Rannals recalls, saying he couldn’t have done it without Harris, who retired in 1993. VIEW FROM THE TOP: Looking back after 30 years, all of our hard work, great product lines and dedicated employees have paid off a hundredfold. Tri-Star has grown from just the two of us in the first six months to more than 30 employees, counting parttimers, and gross sales of about $10 million annually. As for most any food business here, the future looks strong. PRODUCTS & SERVICES: We are a packaged-food wholesale distributor to grocery stores. Our main lines are Keebler crackers and cookies, Cheez-Its, Mission tortillas and chips, Tim’s Cascade Chips and Peet’s Coffee. Main customers are Carrs/Safeway, Fred Meyer, WalMart and military commissaries, and we do a lot of business in the Bush through Alaska Commercial and Eagle (Carrs) grocery stores and other wholesalers. We’ve seen recent growth in our Wal-Mart and Bush businesses, where there is high demand for the type of products we distribute. BUSINESS DRIVERS: Service is a primary driver. We stock, rotate and guarantee all our products. Stores give us the space and we do the rest. Overall, freight charges to bring these products here represent probably the greatest challenge; freight costs are expensive and fuel surcharges are out of sight – all of which must be worked into the cost of goods. This is why things tend to cost more in general in grocery stores in Alaska. LONG VIEW: From the start, we knew we would have to hire and train good people. Today we have the best managers, drivers, salesmen and warehouse people in the state; some come from the competition as well as from other distributors in town. That said – you need to keep them. Our office manager has been here for more than 25 years, two other employees for more than 20 years and five others for more than 10 years. I am proud to say this is more of a home than just a place to work.

LEGACY: I’d like to be remembered as the company that did it all a little better: better people, better service, better and cleaner trucks. Every day we try to take Tri-Star to the next level. I’d also like to be remembered as a person who never took the people he worked with for granted, because I do not! This shows in many efforts, big and small, to keep employees satisfied. My office doors are open; anybody here can see me at any time. ❑

www.akbizmag.com • Alaska Business Monthly • December 2011

NATIVE BUSINESS

Bridging the Gap New management team strengthens ASRC BY JULIE STRICKER

FROM ANCHORAGE TO BARROW The Barrow-based corporation, with administrative offices in Anchorage, is preparing to enter its 40th year, young enough for today’s leaders to have learned first-hand from its founders what it takes to build a successful business. In a way, they’ve grown up with Arctic Slope. “Collectively, all of us, we’ve mentored underneath the senior leadership team, which are basically the people who brought the corporation up from its very beginning,” said Richard Glenn,

rctic Slope Regional Corp. is a force in Alaska business. It is the largest Alaskan-owned company, employing more than 10,000 people worldwide with revenues of more than $2.3 billion in fiscal year 2010. It has prospered over the past 40 years, despite economic, governmental and regulatory challenges, led by the insight of former chief executive officers such as Oliver Leavitt and Jacob Adams. One of its recent goals is to double its already formidable economic influence, and ready to face the challenge is an executive management team in which almost every seat has changed hands in the past two years. In some corporations, so much change at the top would be called a corporate shakeup. At ASRC, it’s indicative of the strength and growth of its officers and a sign of the climate of training and cooperation within ASRC. “While it probably seems externally there seems to have been a monumental role change,” said Tara Sweeney, senior vice president of external affairs, “internally it’s more like shifting chairs and putting people into positions where they can drive the most value.” From Top to Bottom: Richard Glenn, executive vice president, Lands & Natural Resources; Denali Kemppel, executive vice president, General Counsel; Tara Sweeney, senior vice president, External Affairs; Rex A. Rock Sr., president and CEO; Crawford Patkotak, senior vice president, Shareholder Community Programs; Geri Storer, executive vice president, Chief of Operations; Butch Lincoln, executive vice president, Chief Financial Officer; and Cheryl Stine, senior vice president, Chief Administrative Officer.

executive vice president in charge of lands and natural resources. Geri Storer, chief of operations, went through an ASRC managementtraining program and worked closely with former CEOs Adams and Leavitt. She also spent time working at Exxon

and Shell Oil, which gives her a broad perspective of the industries and issues ASRC must deal with. “We’re still operating with the same value system, the same discipline with regards to investments and financial management of our assets,” Storer said.

www.akbizmag.com • Alaska Business Monthly • December 2011

“We’re largely a people-based business. We spend a lot of time communicating with our shareholders.” Arctic Slope Regional Corp. was created by the 1971 Alaska Native Claims Settlement Act. Under ANCSA, Alaska’s indigenous peoples received title to 44 million acres of land and $962.5 million, which was divided between 12 regional and more than 200 village corporations to settle aboriginal land claims.

OIL-RICH LANDS Arctic Slope, which has its land base on the oil-rich North Slope, has been one of the most successful Alaska Native regional corporations. Its diverse portfolio of companies operates in four major business segments: petroleum refining and marketing; government services; energy services; and construction. It also has a resource development segment. In 2000, it reached the $1 billion in revenue. In 2011, it recorded $2.3 billion. At the core are its shareholders and the thousands of years of Inupiat culture that enabled them to survive, and thrive, in one of the world’s harshest environments. Glenn said Arctic Slope has made it a mission to transmit its Inupiat values to younger generations, from the perspective of those with direct knowledge of what ANCSA cost Alaska Natives. “Most of the people remember the Native Claims Settlement Act,” he said. “We’re the first generation of people who worked for the people who were there, who fought the fight.”

FNEF

Please join us in January for an informative look at Alaska’s economy and a forecast of market trends. These much anticipated luncheon events will be conducted in Fairbanks (1/17), Anchorage (1/18), and Juneau (1/19). Get a jump on the competition with the 2012 Statewide Economic Forecast as well as an update on international markets important to Alaska. Please call (907) 278-7233 for details and reservations Also visit our website

www.wtcak.org

ǯ ͙͟͡͠

TEAMWORK A MUST The tone is set by President and CEO Rex Rock Sr. Rock was the longtime chairman of the ASRC board of directors before being named CEO. He served as the president of the Point Hope village corporation and is also a whaling captain and a longtime basketball coach. “ASRC has become so big, even to the village corporations on the North Slope,” said Storer. “Rex brings a lot of credibility to our company. He still lives in Point Hope and he grounds our team really well. He sets the tone from the top.” Rock looks at the management team as a group of individuals with specific www.akbizmag.com • Alaska Business Monthly • December 2011

SIDEBAR

Arctic Slope Regional Corp.

Executive Bios Rex Rock Sr., president and CEO: Rock of Point Hope has been president and chief executive officer since July of 2010, and oversees all aspects of ASRC’s business operations. He has served on the ASRC board of directors since 2003. Rock previously served as president and CEO of Tikigaq Corp. He is a whaling captain and a 20-year basketball coach in Point Hope, where his teams won state championships twice during his tenure. He was elected Coach of the Year numerous times. Richard K. Glenn, lands and natural resources: Glenn earned geology degrees from San Jose State University and the University of Alaska Fairbanks. He specialized in Arctic resource development and onshore and offshore Arctic geologic processes. Until 2001, Glenn headed the North Slope Borough Department of Energy Management. He is a co-captain on a whaling crew, a member of an Eskimo dance group and a rock-n-roll keyboardist. Denali Kemppel, general counsel: Kemppel has been ASRC chief legal officer since 2008. Previously, she was a lawyer at a Boston legal firm, worked for Judge John Sedwick in U.S. District Court, and was a legislative aide to U.S. Sen. Ted Stevens. She received her law degree from Duke University and undergraduate degree, cum laude, from Dartmouth College. She was a nationally ranked crosscountry skier and NCAA All-American.

Energy Services. He has accounting and finance degrees from University of Alaska Anchorage and an MBA from Duke University. Tara Sweeney, external affairs: Sweeney is a longtime advocate of Alaska Native rights and has served on the Alaska Federation of Natives board. She was honored in 2008 as a “Top 40 under 40” business leader by Alaska Journal of Commerce. She lived in rural Alaska most of her life, but left to attend Cornell University, where she received her bachelor’s degree. Geri Storer, chief of operations: Storer started her career with ASRC in 1989 and later worked at Exxon Mobil Corp.and Shell Exploration. She is a graduate of Barrow High School and earned degrees at Wellesley and Harvard universities. Crawford Patkotak, shareholder community programs: Patkotak has served in a variety of positions within ASRC for more than a decade. He served as a council member for the city of Barrow and was elected as a board member of the Barrow Whaling Captains Association and is on the board of trustees for Ilisagvik College.

Butch Lincoln, chief financial officer: Lincoln, who was born and raised in Kotzebue, was named CFO in February, but has worked for the corporation’s subsidiaries for a decade. He was vice president of operations for ASRC

Cheryl Stine, chief administrative officer: Stine manages ASRC’s community economic development efforts and manages the administration, facilities and information technology departments across ASRC. She has experience with SBA 8(a) development and compliance issues. Stine earned degrees from the University of Alaska Anchorage and the University of Alaska Fairbanks.

and diverse strengths that complement the overall mission of the corporation. “I can tell you what I value,” he said. “I place high value and expectations on my team to perform with integrity. I believe in this team.” The concept of teamwork is embraced by the others. “Within our team, it’s been easy for all of us to embrace that concept of teamwork,” said Butch Lincoln, chief financial officer. “We are very complementary on what we all bring to the table. But I find that we rely on each other. We lean on each other. We can

laugh with each other. We don’t worry about who gets the credit.” During a recent conference call with Rock and six others from ASRC’s top management, their camaraderie was evident. They chatted about making soup, a mutual friend’s grandchild, the weak early winter ice conditions around Barrow, and joked about one co-worker’s problems with overly juicy oranges at a conference in Greenland. But when the talk turned to ASRC’s role on the North Slope and in Alaska as a whole, the conversation quickly turned serious.

Rex Rock President/CEO Arctic Slope Regional Corp.

The management team is tasked with continuing to build the company and to provide dividends for its growing ranks of shareholders. The company faces three major challenges, Rock said: the lack of an investment climate and investment leadership from the Alaska Legislature; federal overreach with respect to climate change; and providing sustainable dividends to shareholders.

GROWTH FOR SHAREHOLDERS Tara Sweeney’s job is to oversee federal and State legislative activities. She said regulations at the federal level in regard to the Endangered Species Act have tangible impacts on the North Slope region and its people. “It hampers our ability to grow and provide jobs to our shareholders,” she said. Part of the problem is that many people in the federal government lack an understanding of the federal government’s unique relationship with Native corporations. “That’s a constant educational effort on our part,” she said. Changing regulations, as well as a wildly fluctuating marketplace, pose more challenges. Three of Arctic Slope’s largest subsidiaries are in the petroleum sector: PetroStar, ASRC Energy Services and ASRC Construction. Arctic Slope is keeping a close eye on petroleum markets and working to be as responsive as possible to changes, said Storer, chief of operations.

www.akbizmag.com • Alaska Business Monthly • December 2011

“We are watching very carefully our businesses today and making sure we’re protecting the value of those businesses,” she said. Glenn said the people of the North Slope depend on the environment and resource development in their everyday lives. “The villages are real-world nitty gritty that we’ve built over 30 years at great expense,” he said. “What kind of communities will our grandchildren have? What kind of economy will we have? We depend on the environment, but we also depend on the development.” ASRC is also looking for business opportunities outside Alaska as a way to diversify its holdings, Butch Lincoln said. “Every day, every member of this team is looking inside and outside the state for opportunities,” said Denali Kemppel, general counsel. Those opportunities need to translate into real dollars and cents for shareholders living on the North Slope, added Crawford Patkotak, senior vice president for shareholder community

programs. Patkotak said one of the corporation’s biggest challenges is the depressed economy within the villages. “There’s a lack of jobs,” he said. “There’s really no economy. It’s been our challenge to really invest in our people.”

OUTSIDE PRESSURE Sweeney said that outside environmental groups are placing so much pressure on resource development efforts that they are threatening business on the North Slope. “The questions we face every day are ‘How are our people going to put milk on the table and clothes on their children?’” Sweeney said. “These are realities the NGOs (nongovernmental organizations) fail to recognize or don’t care to recognize. They use Native groups as mouthpieces, they move on and our people are still in our communities, struggling.” ASRC looks to find a balance between economic development, resource development and passing on the traditional way of life and culture of the North Slope. Forty years ago,

the North Slope region voted against ANCSA, calling it fundamentally unfair to Alaska Natives. Among its many criticisms was the fact that only people alive at the time the bill was signed in 1971 were allowed to become shareholders. As soon as it was possible under the legislation, Arctic Slope Regional Corp. passed a resolution to enroll shareholders born after 1971. Today, nearly 70 percent of the 11,000 ASRC shareholders were born after 1971. In fact, being a shareholder in ASRC may be one of the only links some in the younger generations have to their Inupiat heritage, Patkotak said. Finding ways to bridge the heritage gap hasn’t been easy, but it’s part of a mandate the management team embraces. “The challenges are not new to ASRC and I think that what’s been passed on from early leadership is to embrace the challenges,” Patkotak said “We continue to grow in the number of shareholders and that drives us to steadily grow the company, to be profitable and be able to distribute reasonably sized dividends.” ❑

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NATIVE BUSINESS

Native Partnerships Best of both worlds BY JULIE STRICKER

©Ken Graham Photography Photography.com com

bout five years ago, Cook Inlet Region Inc. started work on an ambitious multimillion-dollar real estate project in Anchorage. A few months later, a financial crisis spreading across the globe hit the United States, derailing thousands of businesses and projects, even in Alaska. But not CIRI’s. That project is now Tikahtnu Commons, the largest retail and entertainment center in Alaska. “By all means, it should have crumbled,” said Jim Jager, director of communications for CIRI, “but it’s very successful.” That success is due largely to the partnership between subsidiary CIRI Land Development Co. and Browman Development Co. to develop the project, Jager said. CIRI has long had a strategy of forging partnerships with companies that are leaders in their fields and whose business methods mirror its goals. Browman, based in Walnut Creek, Calif., has worked on many large retail projects in California and the Northwest United States and has strong connections with retailers that are a good fit in Alaska, Jager said.

Tik h Tikahtnu Commons C iin A Anchorage, h d developed l d through h h a partnership hi b between CIRI Land Development Co. and Browman Development Co. It’s an example of a Native partnership that worked.

Partnerships allow companies to share the risk and to combine disparate strengths to get a project done. “We partner with companies that have both the ability and the incentive to make the joint project a success,” Jager said.

‘ALIGNED INTERESTS’ “You want to have aligned interests,” Jager said. “Where projects fail is where the interests don’t align,” such as when one company wants to develop and sell it and the other is seeking a long-term project. A partnership is only successful if both sides benefit. CIRI has made a point of partnering with companies that are leaders in their respective fields, such as Hyatt Development Corp. in the hotel/resort industry; T-Mobile USA in telecommunications; and Laurus Energy for their underground-coal-gasification project on the west side of Cook Inlet.

HISTORY LESSON Since their creation under the 1971 Alaska Native Claims Settlement Act, Alaska Native corporations have formed hundreds of partnerships with nonNative firms in diverse lines of business, from construction to tourism to mining to government contracting. Such partnerships allowed the corporations to share the risk in new enterprises and to develop competency in their selected fields. Under ANCSA, Alaska Natives dropped their aboriginal land claims in return for title to 44 million acres of land and $962.5 million. Twelve

regional corporations were created to manage the lands and money, and given a dual mandate to create economic opportunities for their shareholders as well as to provide for their social and cultural well-being. Non-Native businesses also must keep those dual mandates in mind, Native leaders say, especially when it comes to resource development in rural Alaska. Villages that will be affected by development need to be included in decisions related to the project. Businesses must respect Native land ownership and take subsistence hunting seasons into consideration when scheduling meetings related to those projects. Even in an urban setting, partnerships require mutual understanding and goals. “By bringing those together, we have a very successful development,” Jager said.

www.akbizmag.com • Alaska Business Monthly • December 2011

For Tikahtnu Commons, CIRI had the land and the money and Browman had the connections and retail expertise for the project. More important, though, the two businesses shared common goals. Both were in it for the long haul, so they agreed to build the retail center in a way to reduce long-term maintenance costs, Jager said. That decision played into how the drainage system is designed, the materials used as well as whether to install heated sidewalks in some areas to reduced snow and ice removal costs. The 95-acre development is located in northeast Anchorage, on the corner of North Muldoon Road and the Glenn Highway, and miles away from the part of the city that retailers swarmed to in the 1990s. That was key for anchor store Target, which was interested in opening a store in Alaska, but wanted a high-end, professionally management property in an uncongested area. Work on the project is continuing, with an Olive Garden restaurant slated to open in early 2012 and other retailers expected to sign on in the next

two years. When complete, Tikahtnu Commons will contain about 1 million square feet of retail space.

RURAL LOCAL HIRE In rural areas, local hire is an important consideration and has been a key part of every enterprise Kotzebue-based NANA Regional Corp. has undertaken. NANA Regional has had a long, fruitful relationship with Teck Resources at the giant Red Dog zinc mine in Northwest Alaska. For the past 20 years, Teck and NANA Development, the for-profit arm of NANA Regional, have worked together to provide jobs, create revenue from mining operations, protect the environment and gain experience to expand operations in other fields. “When we’re talking to potential partners, they know our mission is to improve the quality of life for our shareholders,” said Shelly Wozniak, manager of corporate communications for NANA Regional Corp. “We look for revenue and we also look for jobs and other ways shareholders can participate.” One example is NANA’s partnership

with Rural Cap to help deliver the EnergyWise program to northwest Alaska communities. The program hires and trains local residents to educate their neighbors about energy efficiency and make basic upgrades to homes. It is expected to provide 110 jobs in a region where jobs are scarce. It’s a perfect fit for NANA, Wozniak said. “There’s a training opportunity, there’s direct employment, and they get their homes weatherized, so it’s a savings in money and energy for them as well,” she said. NANA emphasizes the importance of providing for its shareholders front and center, telling potential partners: “When you do business with NANA, you’re doing more than ensuring the success of your next business venture – you’re helping to create training and educational opportunities for NANA villages, preserving an important American culture, investing in NANA communities and ensuring the future of a people.” A new mineral exploration project in the upper Kobuk River region won’t be as large as Red Dog, but will still

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provide many opportunities for shareholders, Wozniak said. NANA is working with NovaGold Resources Inc. to develop its Ambler project. NANA can participate as a joint-venture partner or receive royalties once production begins in the region, which contains copper, zinc, lead, gold and silver. It’s a project that stands to benefit both parties, Wozniak said. “One of the biggest benefits (for NovaGold) is they get a trained and ready local work force,” Wozniak said. “These are people who are local, who are knowledgeable about the area, who are ready to work and will stay with the job.” NovaGold president and chief executive Rick Van Nieuwenhuyse also stressed that cooperation between the two will be essential to the success of the project. “Notably, both parties are contributing resources to create the opportunity to take a consolidated and cost-effect approach to exploring and developing one of the richest and most prospective copper districts in one of the safest

geopolitical jurisdictions in the world,” he said in an October news release.

DOYON’S PARTNERS Fairbanks-based Doyon Ltd., is also partnering with a slate of companies to explore potential mineral, oil and gas holdings in Interior Alaska. It is working with Canadian junior mining companies Full Metals Minerals, FreeGold Ventures and Newmont to identify gold, silver, zinc, lead and copper deposits. It is also actively exploring for oil and natural as well in the Nenana and Yukon basins. Doyon and partners Arctic Slope Regional Corp., Usibelli Energy, Rampart Energy of Denver and Minnesota-based Cedar Creek Oil and Gas Co. are continuing to explore the Nenana basin. A 2009 well did not show commercial quantities of natural gas, but further studies look promising, Doyon states. Doyon and its partners plan to conduct additional seismic exploration this winter. Anchorage-based SA Exploration has been contracted to do the work. Doyon also partners with Aramark in

a joint venture agreement that supplies bus shuttle tours, food and beverages and other activities at Denali National Park and Preserve. In 2010, the joint venture was awarded an Environmental Achievement Award by the National Park Service for its success in reducing the overall environmental footprint at the park. By reducing energy and water consumption, improving fuel efficiency and enacting a recycling program, the joint venture reduced its carbon footprint by 20 percent.

GOVERNMENT SERVICES Outside of Alaska, Native corporations have made a name for themselves in the government-services field. Although most corporations and subsidiaries operate under the Small Business Administration’s 8(a) business development program, many have graduated from the program and are successfully competing for contracts in the open market. Alaska Native corporations are 100 percent minority-owned businesses, which is an asset in a marketplace in which many major companies are seeking to boost the diversity of their operations by partnering with entities owned by women and minorities. For instance, companies that do business with the federal government must meet diversity requirements for subcontracting to small and minority-owned businesses. Chugach Alaska Corp. has been a leader in the government contracting field. It employs more than 5,400 workers around the world and has offices in Virginia, Hawaii, Alabama and Nevada, as well as its headquarters in Anchorage. While who they are is important, it is Chugach Alaska’s “proven track record of delivering cost-saving, awardwinning services” to their government and commercial clients that makes them a sought-after provider of those services. Chugach and its subsidiaries have earned many accolades for the quality of its work in base operations and facilities maintenance services. In 2010, subsidiary Chugach Industries Inc. was recognized by the U.S. Army as the Support Contractor of the Year for its work at the U.S. Army GarrisonPicatinny Arsenal. It’s one of many partnerships paying ❑ dividends for both parties.

www.akbizmag.com • Alaska Business Monthly • December 2011

A S S O C I AT I O N S

BY TRACY BARBOUR

Alaska Travel Industry Association Creating jobs, strengthening families, increasing revenue

Azimuth Adventure Photography/www Photography/www.azimuthadventure.com azimuthadventure com

stablished in 2000, the Alaska Travel Industry Association (ATIA) is a relatively new organization. But to date, it has approximately 1,100 members – reportedly more than any other travel industry trade association in the United States. The association is an amalgamation of different factions. “There were a number of different entities that were involved in tourism and promotion, so the theory was: let’s consolidate and become more efficient,” says President and Chief Operating Officer Ron Peck. ATIA represents a very diverse group of members. Many of them are businesses that want to promote their products and services to potential Alaska visitors. These members typically advertise in the Official Alaska State Vacation Planner, TravelAlaska. com or at various travel and consumer shows. There are also affiliate members who aren’t looking to sell to visitors; they simply want to stay in front of Alaska businesses that service visitors. Other members of ATIA include community partners who want to see visitation grow in their area and tourism advocates that are interested in keeping abreast of the latest industry news.

MISSION OF ATIA ATIA operates under an extremely focused mission statement: To develop Alaska’s travel resource for the maximum benefit of Alaskans – creating jobs for Alaskans, strengthening Alaskan families and generating additional revenue for Alaska. Tourism planning also is an important element of the association’s mission, which maintains “ATIA will be the leading industry organization promoting Alaska as a top visitor destination, communicating

Ron Peck President and Chief Operating Officer Alaska Tourism Industry Association

and promoting the Alaska tourism industry as one of the state’s major economic forces, and will be the respected voice of the industry for the growth of the industry, while remaining attentive to care for the environment,

recognition of cultures and Alaska’s unique quality of life.” Within its mission, ATIA has two broad objectives. One of them is to advocate important issues for its members, including land policy, regulatory and

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taxation matters. For example, ATIA is currently working to address a proposed plan for managing vehicles along the road that leads to Denali National Park and Preserve. Denali National Park – which attracts hundreds of thousands of visitors each year – is a huge component of Alaska’s visitor industry, says Peck, who wants to ensure the parks continued accessibility. “We want to make sure that we’re good stewards of the park and that we can make the park available in a meaningful way for as many visitors as we can,” he says. ATIA is also working with the U.S. Forest Service regarding the types of tours being offered in the Tongass National Forest. Other important concerns of the organization include wildlifemanagement issues and halibut sportfishing regulations.

MARKETING ALASKA Another broad objective of ATIA is to serve as a marketing arm that promotes Alaska as a viable destination. It’s a challenging endeavor. Tourists visit the state for a wide variety of reasons, but many people think of Alaska as “one big park,” Peck says. They also think of Alaska as a far-flung, difficult place to visit. However, ATIA is working to educate tour operators to make Alaska easier to promote. “We let folks know that it’s really not that far,” Peck says. “We want to help overcome the perception that we’re a complicated destination.” In its efforts to disseminate its marketing message, ATIA uses a variety of programs and advertising vehicles. The mix includes TV, magazine and online advertising, as well as international marketing in places like Japan, Korea, the United Kingdom, Australia and New Zealand. As an organization, ATIA is constantly striving to be relevant to its membership, Peck says. In the past year, the association has focused on implementing a more effective means to communicate to its members and tell the tourism story in a better way. In October, ATIA launched its first newsletter, which was mailed out and posted online for easy access. The organization is also having its industry leaders and staff speak to clubs and other groups about relevant issues.

“We’re working more diligently about educating Alaskans about why the visitor’s industry is good and important to the state’s economy,” Peck says.

FUNDING, A CRITICAL ISSUE Selling Alaska as an attractive destination is a huge job. That’s why ATIA is calling on the State to create a sustainable long-term tourism marketing fund. Alaska, which is considered a “long-haul” destination, needs a $20 million tourism marketing budget to even begin to compete successfully and bring Alaska’s travel resource to market, according to Peck. He points out that competing long-haul destinations spend much more than $20 million on marketing. For example, Hawaii, Australia, Las Vegas and New Zealand spend $88 million, $153 million, $160 million and $73 million, respectively. However, this year, the Alaska Department of Commerce, Community and Economic Development reduced the funds for the State’s tourism marketing program from $16 to $12 million,

which is making ATIA’s job even more difficult. “We’re making it work as best as we can,” Peck says. ATIA would like to see the State reinvest a minimum of $20 million from existing travel industry paid taxes and fees back into Alaska’s tourism marketing program. It also wants the sources of the State’s reinvestment in Alaska’s tourism marketing program to be clearly identifiable as existing travel industry generated revenues collected by the State. In addition, ATIA feels there should be a growth mechanism that ensures Alaska’s tourism marketing budget will increase over time at a rate proportionate to the growth of Alaska’s travel industry. ATIA will continue to address the tourism marketing funding issue to help the State devise an amenable and workable funding solution. Peck says, “Our future goal is to work very diligently with the administration and this legislature to address and solve a long-term funding structure so that we can market the state effectively for Alaska’s busi❑ nesses large and small.”

www.akbizmag.com • Alaska Business Monthly • December 2011

RIGHT MOVES CALISTA CORP.

W ddl Weddleton

Sharon Weddleton was hired as chief financial officer for Calista Corp. Weddleton most recently served as chief financial officer for Bristol Industries LLC, a subsidiary of Bristol Bay Native Corp.

AMERICAN MARKETING ASSOCIATION ALASKA CHAPTER

Members of the Alaska Chapter of the American Marketing Association elected a new board of directors. They are: Jessica Bertz, University of Alaska Anchorage, president; Lexie Mizeras, Alaska SeaLife Center, president-elect; Jay Blury, Northrim Bank, secretary; Jeri Rubin, UAA, treasurer; Christina Young, Alaska Public Telecommunications Inc., community liaison; Cathy Opinsky, AT&T, registration director; Larry Cleland, Koahnic Broadcast Corp., hospitality and facilities director; Heidi Miles, State of Alaska, membership director; Alonna Pfleiger, Nerland Agency, communications co-director and Lena Schultze, Klondike Advertising, communications co-director.

ANCHORAGE ECONOMIC DEVELOPMENT CORP.

Emily Bolling joined the Anchorage Economic Development Corp. as communications coordinator. Bolling previously served as marketing director for Anchorage Downtown Partnership Ltd .

COMPILED BY NANCY POUNDS as Local Chamber of Commerce of The Year. The chamber was recognized for its efforts providing pro-business support for the Fairbanks community. Mikunda, Cottrell & Co. Inc. received the Bill Bivin Small Business of The Year award. The award honors businesses that exemplify leadership, ethics and organization. The firm has grown from a small accounting firm in 1977 to the state’s largest locally owned certified public accounting firm.

ALASKA NATIVE TRIBAL HEALTH CONSORTIUM

H l Helgesen

PROVIDENCE BEHAVIORAL MEDICINE GROUP

Dr. Lee Ann Gee has joined Providence Behavioral Medicine Group in Anchorage. Gee specializes in adult psychiatry. She completed her psychiatry residency training at the University of Louisville in Louisville, Ky. In Kentucky, Gee was the 20102011 Chief Resident of the Medicine Psychiatry Residency Program and received with the 2011 Harvey St. Clair, MD, Award in psychodynamics.

LANDYE BENNETT BLUMSTEIN LLP

ALASKA STATE CHAMBER OF COMMERCE

Susan Bramstedt received the Alaska State Chamber of Commerce’s William A. Egan Alaskan of The Year award. Bramstedt is the former Alaska Airlines’ director of public affairs for Alaska. She is executive director of the Alaska Airlines Foundation. The award honors the statewide contributions of individuals working in the private sector. The Greater Fairbanks Chamber of Commerce was honored

Roald Helgesen was chosen as chief executive for the Alaska Native Tribal Health Consortium. Helgesen previously was president and chief executive of the SouthEast Alaska Regional Health Consortium, where he had served since 2007.

P b d Peabody

M a t t h e w Pe a b o d y joined Landye Bennett Blumstein LLP as an associate attorney at the firm’s Anchorage office. He specializes in corporate, business and commercial transactions, real estate and civil litigation. He served in the

U.S. Navy and earned his law degree from Penn State University’s Dickinson School of Law.

CREDIT UNION 1

Maria Quick was promoted to financial controller at Credit Union 1. Quick previously served as senior financial analyst. She joined the credit union in 2006 as a financial analyst.

WASILLA PHYSICAL THERAPY

Jean Lindberg joined Wasilla Physical Therapy as a therapist. Lindberg has 27 years of experience as a physical therapist. Lindberg specializes in foot evaluations and developing customized shoe inserts, and she is trained in workers’ compensation injury rehabilitation, among other skills.

AHTNA NETIYE’ INC.

Robert Sandt was appointed chief executive for Ahtna Netiye’ Inc. The company is a newly formed holding company for Ahtna Inc. Sandt has more than 36 years of executive management experience, including 11 years working with the U.S. Small Business Administration 8(a) program.

ALASKA BUSINESS HALL OF FAME

Three state business leaders will be honored as new members of the Alaska Business Hall of Fame. The honorees are Will Anderson of Koniag Inc., Bob Dindinger with Alaska Travel Adventures Inc. and the Green Family of David Green Master Furriers. They will be recognized for their support of Junior Achievement programs and commitment to Alaska business at a ceremony Jan. 26 at the Dena’ina Civic & Convention Center in Anchorage. Alaska Business Monthly and Junior Achievement of Alaska are major sponsors of the event.

LAND’S END RESORT

Darrel Oliver was chosen director of hospitality for Land’s End three properties: Land’s End Resort in Homer, the Van Gilder in Seward and Kenai Landing in Kenai. Oliver has worked 17 years for the company as food and beverage director for Land’s End Chart Room Restaurant in Homer.

www.akbizmag.com • Alaska Business Monthly • December 2011

RIGHT MOVES U.S. SEN. LISA MURKOWSKI’S OFFICE

Stefanie Moreland was hired to serve as U.S. Sen. Lisa Murkowski’s legislative aide covering fisheries and Arctic issues. Moreland works in Washington, D.C., for the Alaska senator. Moreland previously served as federal fisheries coordinator, extended jurisdiction program manager and economist for the State Department of Fish and Game.

ALASKA SMALL BUSINESS DEVELOPMENT CENTER

Ryan Gilbert was hired as a business advisor for the Alaska Small Business Development Center. He previously worked as a private consultant for RBG Group Alaska, serving nonprofit organizations. Gilbert has experience in international business development and founded an import and wholesale distribution company in Japan.

FEDERAL GOVERNMENT

Renee Johnson was appointed business programs director for Alaska for the U.S. Department of Agriculture Rural Development. She has 11 years of experience with the USDA, where she previously served as J h Johnson a loan specialist in the Palmer state office. She also serves as the Alaska broadband coordinator and cooperative development specialist

SOUTHEAST ALASKA REGIONAL HEALTH CONSORTIUM

Dr. Ann Patterson was hired as anesthesiologist for SouthEast Alaska Regional Health Consortium’s S’áxt’ Hít Mt. Edgecumbe Hospital in Sitka. Patterson previously worked in private practice in Brandon and Canton, Miss. Maria Marra was chosen as SEARHC’s director of the new performance improvement division. She has worked with SEARHC for more than 18 years. She is based

SPONSORED in Sitka. The new division aims to coordinate a consortium-wide effort in quality improvement. The division includes three performance improvement managers – one each in Juneau and Sitka, – four patient advocates, based in Sitka, Juneau, Klawock and Anchorage, two infection control/safety officers, based in Sitka and Juneau, an employee health nurse and a data specialist. Susan Labus was hired as chief operating officer for SEARHC. She is based in Sitka. Labus recently worked as a hospital executive consultant with Kurron and Co. Inc., which dispatched her to serve as chief operating officer at a hospital in Bermuda. John Myers joined SEARHC as a licensed professional counselor and regional behavioral health supervisor in Haines. Myers has worked in Soldotna and Homer. He has served as president of the Alaska Counseling Association and the Kenai Peninsula Counseling Association.

ALASKA AIRLINES

Tim Thompson was chosen Alaska Airlines’ new manager of public affairs for Alaska. He replaced Susan Bramstedt, who retired in October after serving 45 years with the company. Thompson is a former partner of Thompson & Co. Public Relations of Anchorage.

STOEL RIVES LLP

Jim Torgerson was chosen Anchorage Best Lawyers Litigation-Environmental Lawyer of the Year for 2012. Torgerson is the managing partner in Stoel Rives LLP’s Anchorage office. Firm officials report he is the only Anchorage lawyer honored in this area of law. Best Lawyers lists one lawyer in each specialty for every city where reviews are conducted.

TEACHER

OF THE

YEAR

Lorrie Heagy, 2011 Alaska Teacher of the Year, was honored by Wells Fargo, which included a message about her achievements on most of its . 120 automated teller machines statewide. Heagy teaches music and library classes at Glacier Valley Elementary School in Juneau.

WELLS FARGO

Jason Potasnik was appointed relationship manager for Wells Fargo’s institutional retirement

NORTHERN AIR CARGO

and trust division. He has worked five years with the division. He joined Wells Fargo in 2002 and has served as an account manager in Wells Fargo’s shareholder relations and card services departments in Minnesota. Dayna Corey, Kristin Harding and Jaime Trevino were hired as home mortgage consultants in Anchorage. Corey has six years of experience as a real estate agent and mortgage loan officer. Harding has 14 years of mortgage-lending experience in Alaska and California. Trevino has five years of experience as a Wells Fargo personal banker and assistant branch manager.

HILCORP ALASKA LLC

John Barnes was hired as senior vice president of exploration and production for Hilcorp Alaska LLC, a subsidiary of Hilcorp Energy Co. of Houston, Texas. He most recently served as senior vie president of operations and maintenance services for CH2MHill.

STATE GOVERNMENT

Trudy Wassel received the American Association of Aviation Executives Northwest Chapter 2011 Aviation Excellence Award. Wassel is business manager at Ted Stevens Anchorage International Airport. The award honors airport management professionals who demonstrate outstanding quality in their airport responsibilities. John Johansen has earned the Accredited Airport Executive accreditation through the American Association of Airport Executives. Johansen is manager of engineering, environmental and planning for Anchorage International Airport. Jay Willoughby was appointed chief investment officer for the Alaska Permanent Fund Corp. He previously served as co-managing partner at Ironbound Capital Management, a mid-sized hedge fund based in New Jersey. He also worked nine years at Merrill Lynch as chief investment officer for a program serving highnet-worth private investors. Travis Russell was assigned to serve as Alaska State Parks ranger for Valdez and Prince William Sound. He has worked at Shuyak Island State Park and Chena River State Recreation Area. His duties include natural resource management, facility maintenance, resource protection, community outreach and education. ❑

www.akbizmag.com • Alaska Business Monthly • December 2011

OIL & GAS

Photos by Judy Patrick Photography

Nabors Rig 7ES: Nabors rig hands wear the proper PPE for the job. Specialized gloves, eye and ear protection and a hard hat.

Preventing Blowouts Drilling safety top priority in state BY MIKE BRADNER

he Macondo oil well blowout in the U.S. Gulf of Mexico has heightened concern over safety practices in the oil and gas industry like nothing since the Exxon Valdez tanker accident in Alaska in 1989. Like Exxon Valdez, Macondo was a wake-up call. Drilling safety has moved to the forefront in terms of concerns about the industry. In Alaska, this has manifested itself in the intense focus on plans by Shell and other companies to drill in the Arctic offshore in 2012 and 2013. But there are concerns for everything

offshore with oil, including the new drilling by a jack-up rig in Cook Inlet, in southern Alaska and also onshore wells. A lot of attention by the public and government regulators is on oil spill cleanup and how it could be done in the Arctic, but the attention of regulators also is focused intensely on spill prevention, which really means the prevention of an accidental release of oil and particularly the prevention of a well blowout, as happened at the Macondo well. “Our message to the president’s

commission reviewing the Macondo disaster is that the emphasis of regulators should be on prevention, not so much response,” said John Norman, one of three Commissioners of the Alaska Oil and Gas Conservation Commission. “The emphasis should be on keeping the cage door closed and locked, not just planning how to recapture the tiger after it has escaped,” Norman said. The AOGCC is an independent State regulatory commission that provides oversight on drilling safety and other industry practices.

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STRINGENT RULES The State of Alaska’s drilling rules were very strong even before Macondo – stronger that the federal government’s – and a detailed post-Macondo review of regulations by the AOGCC and outside experts revealed no major flaws except in one area, a specific requirement for a plan to control a blowout, according to Kathy Foerster, another AOGCC Commissioners. The authority to require such a plan will be requested from the State Legislature in its 2012 session, Foerster said, because it will require an amendment to the conservation commission’s governing statute. Interestingly, Alaska is the only U.S. state to conduct a detailed review of drilling regulations following the Gulf of Mexico disaster. The Commission is also adding to its staff of inspectors and drilling engineers because of the greater scrutiny that the State is giving drilling operations, Norman said. The federal government has moved aggressively to institute reforms of its offshore drilling regulatory practices, including splitting the former U.S. Minerals Management Service into three new agencies, with one of them, the new Bureau of Safety and Environmental Enforcement (BSEE) charged with regulation of drilling safety. “The reorganization is designed to remove the complex and sometimes conflicting missions of the former MMS by providing each of the new agencies with clear areas of focus,” the BSEE said in a policy paper. New requirements include offshore operators demonstrating that they have the capability of handling a blowout, new standards for well design, environmental compliance and other safeguards. For the first time, federal rules will require offshore drillers to maintain comprehensive safety and environmental programs, including performance standards for drilling and production operations, and management oversight of operations and contractors, according to information supplied by the BSEE. New workplace safety rules will require companies to maintain a safety and environmental management system.

WHEN CAPABILITY COUNTS...

...COUNT ON FUGRO www.fugro.com

PROTECTION FROM BLOWOUTS As Macondo vividly demonstrated, a blowout is the industry’s worst www.akbizmag.com • Alaska Business Monthly • December 2011

nightmare. It is an uncontrolled flow of petroleum up the well-bore, often at high pressure. In the old days it was called a “gusher” and it was then often considered good, because it showed an early wildcatter’s well had hit oil. However, in the modern petroleum industry, with deeper and higher-pressure wells, blowouts are extremely dangerous. They can lead to loss of life, heavy damage to equipment, loss of a valuable resource (oil that is spilled or gas vented to the atmosphere) and a possible spill of

oil to land or water around the well. All of these things happened in the Macondo blowout. They have happened in Alaska, too, although they are rare and blowouts in the state so far have been gas blowouts, not oil. There has never been a case of oil released in an Alaska blowout reaching land or open water, Foerster said. Since 1962 there have been four offshore blowouts in Cook Inlet, all involving releases of gas. The last one was in 1987. On the North Slope, there have been seven blowouts of

5,000 wells drilled since the Prudhoe Bay oil field was discovered in 1967. None of them involved a release of crude oil, and none caused injuries. Off Alaska’s coasts, such as in the Arctic offshore that is beyond the State’s three-mile territorial limit, the industry operates under the regulatory jurisdiction of a federal agency, the U.S. Bureau of Energy Management (formerly the U.S. Minerals Management Service. In offshore areas within the State’s three-mile limit, in water bodies like Cook Inlet and onshore, the State of Alaska has regulatory authority, which is exercised through the Alaska Oil and Gas Conservation (AOGCC) on all lands and the Division of Oil and Gas on State-owned onshore lands. Onshore, on federal lands where oil and gas exploration is allowed, the managing federal agency has authority along with the State’s AOGCC. This would include the U.S. Bureau of Land Management for the National Petroleum Reserve in northern Alaska and the U.S. Fish and Wildlife Service for the Kenai National Wildlife Refuge, where there is not only petroleum exploration but also production.

ATTENTION KEY There is special attention being focused on drilling safety in the Arctic with Shell and other companies because the Arctic is a new frontier where cleanup of an oil spill is even more challenging than in other places, and where a blowout in ice could have catastrophic consequences. Arctic regions, however, aren’t the only parts of Alaska where there is new scrutiny of drilling safety. In Cook Inlet, jack-up rigs operated by a small independent company, Escopeta Oil Co., began working in Cook Inlet in late 2011. Drilling was to be suspended for the winter months in November and will resume drilling in early 2012. In 2012 Escopeta will be joined in Cook Inlet by a second jack-up rig drilling for Buccaneer Energy, another small independent company also new to Alaska. Buccaneer has drilled one onshore exploration well on the Kenai Peninsula, however. For both Escopeta and Buccaneer, the oversight challenges are magnified because the drilling companies are new to Alaska as well as the oil companies

www.akbizmag.com • Alaska Business Monthly • December 2011

owning the leases. Blake Offshore, the company drilling for Escopeta, has operated in the Gulf of Mexico for years but is new to Alaska and Cook Inlet. Buccaneer’s wells, meanwhile, will be drilled by a new company, Kenai Offshore Ventures, in which Buccaneer is part-owner. Interestingly the State of Alaska will own part of this rig as well, through a $30 million equity investment by the Alaska Industrial Development Authority. The State’s AOGCC and the State Division of Oil and Gas, which provides oversight of industry activity on Stateowned lands (AOGCC’s jurisdiction is on drilling on all lands, private and federal) are paying special attention to the two companies. State inspectors will give attention to the safety equipment on the rigs and particularly the blow-out preventers. State rules require the testing of blowout preventers every seven days on exploration wells being drilled and “workover,” or maintenance wells, Using the correct PPE prevents injuries. Gloves provide protection from hand injury on Nabors Rig 7E.

www.akbizmag.com • Alaska Business Monthly • December 2011

Gloves are a big part or worker safety on drilling rigs.

and every 14 days on new production wells being drilled. The test results must be filed with the Commission. AOGCC inspectors are also on-scene to witness many tests and the Commission’s records indicate State inspectors attend tests of well control systems on every active drill rig in the state once every two months. The AOGCC’s data shows a “pass rate” of 98 percent for blowout control equipment.

BOP PROTECTION A blowout preventer, or BOP, is the mechanical device intended to control and close off a well if there is an uncontrolled flow of oil and gas. The BOP is positioned at the top of a well and just under the drilling floor of the rig while the well is being drilled. It contains mechanical “rams,” which are to be closed if there is an uncontrolled flow of fluids up the well. The rams seal off the well, preventing the oil and gas from reaching the rig floor where a fire or explosion might occur, or from where oil might spill off the rig into the environment. As the well is drilled, drilling fluid, or “mud” is pumped down the drill string to the drill bit at the bottom and returns up the well-bore in the space,

www.akbizmag.com • Alaska Business Monthly • December 2011

or annulus, between the outside of the drill pipe and the casing, or the largerdiameter pipes, that line and protect the well. The column of drilling fluid being pumped down, which would be a mile or more long when a well extends 5,000 feet to 10,000 feet or more, has considerable weight and exerts a tremendous downward hydrostatic pressure in the well. At the bottom, where there is an “open hole” with no casing, the circular tubing through which the well drilled, the hydrostatic pressure provides an “overbalance” of pressure that exceeds the natural pressure of the reservoir into which the well is drilled. The overbalance of pressure prevents oil and gas fluids from entering and coming up the well-bore. Sometimes the drillers encounter a gas “kick” or a surge of unexpected high pressure if they encounter a pocket of high-pressure gas. Shallow gas pockets are the cause of all of Alaska’s blowouts except one. Instruments in the well typically detect a rapid gas and pressure buildup this and the drillers can counter this by closing the BPO and pumping heavier

907.274.1000 ■ ■ ■

fluids under higher pressure through a choke, or restricted pipe, in the BOP. This is to overcome the pressure of the petroleum fluids and pushes them back down the well, bringing it back under control. Surveys of drilling locations are required to detect shallow gas hazards but sometimes drillers can be unpleasantly surprised. However, improvements in seismic technology, which can detect shallow gas hazards, and the increased regulatory scrutiny has greatly reduced the chances of a blowout in recent years.

ALASKA SAFE? However, if the unexpected upward flow of fluids is not brought under control a blowout can result, potentially pushing the steel tubing, or pipe, back up out of the well, damaging the well, the rig and potentially causing loss of life or injuries to the drill crew. The primary danger is the oil and gas itself, which are flammable and explosive. The mud system and the pressure it exerts is the primary method for controlling the well. The blowout preventer is a final defense, and a vital one.

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Blowout preventers are used on both land and offshore rigs. In both cases the BOP is secured to the top of the wellbore. With a deep offshore well this would be at the sea bottom, with a “riser” or flexible pipe extending up to the drill rig on the surface. The riser provides a secure and enclosed path for the drill string, which rotates to drill the well, and drill fluids, or muds, that are pumped down the well to control pressure and then recirculated back to the rig at the surface. On the Macondo well, the blowout preventer on the Deepwater Horizon rig failed to function, causing an explosion and fire that killed several people, destroyed the rig and caused one of the worst peacetime oil spills in the history of the industry. One of the conclusions of the investigations following the Macondo blowout is that the types of BOPs in use in 2010 were not sufficient to prevent very powerful ruptures, such as was experienced in the Deepwater Horizon blowout, and that improvements in design and engineering are needed. The industry is now working on this. ❑

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www.akbizmag.com • Alaska Business Monthly • December 2011

AGC 2011 CONSTRUCTION AWARDS

Associated General Contractors Names 2011 Award Winners Top construction projects and safety recognition

Hard Hat Award Jerry Neeser, president of Neeser Construction Cornerstone Construction

Courtesy of Cornerstone General Contractors Inc

Courtesy of Kiewit Building Group.

3 Kiewit Building Group

Courtesy of Mowat Construction Co.

4 Mowat Construction

Davis Constructors Courtesy of Davis Constructors and Engineers Inc.

Courtesy of Neeser Construction

he Associated General Contractors of Alaska (AGC), the state’s largest construction organization, named its top construction projects, safety programs and individuals at the association’s annual conference in Anchorage, Nov. 2-5. The Hard Hat Award, given annually to an AGC member who has demonstrated exemplary service to the association, the community and the industry was awarded to Anchorage contractor Jerry Neeser, president of Neeser Construction. In the Alaska USA Insurance Brokers-sponsored “Excellence in Construction Awards,” the following firms won awards in “Meeting the Challenge of a Job” 1 Buildings Under $5 Million ■ – Davis Constructors and Engineers Inc. for Providence Building X Adaptive Reuse 2 Buildings Between $5 Mil■ lion and $15 Million – Cornerstone General Contractors Inc. for AVTEC Culinary School Building, Seward 3 Buildings Over $15 Million – ■ Kiewit Building Group for Anchorage Sport Fish Hatchery 4 Transportation, Marine, ■ Heavy, Earthmoving Over $3 Million – Mowat Construction Co. for Humpback Creek Intake/Diversion Rehabilitation Phase 2, Prince William Sound

www.akbizmag.com • Alaska Business Monthly • December 2011

AGC 2011 CONSTRUCTION AWARDS 6

Exclusive Paving

Denali Drilling

Courtesy of Denali Drilling Inc.

Courtesy of Exclusive Paving for Wendell Avenue improvements, Fairbanks

7 Superior Plumbing and Heating

www.akbizmag.com • Alaska Business Monthly • December 2011

Courtesy of Superior Plumbing and Heating

5 Transportation, Marine, ■ Heavy, Earthmoving Under $3 Million – Exclusive Paving for Wendell Ave. improvements, Fairbanks 6 Specialty Contractor: ■ Transportation, Marine, Heavy, Earthmoving With Specialty Contractor as Sub-Contractor – Denali Drilling Inc., for Richardson Highway Shaw Creek Bridge, Milepost 289 7 Specialty Contractor: Verti■ cal Construction With Specialty Contractor as Sub-Contractor – Superior Plumbing and Heating for William Jack Hernandez Sports Fish Hatchery, Anchorage 8 Specialty Contractor: Verti■ cal Construction With Specialty Contractor as Prime Contractor – Coldfoot Environmental Services Inc., Heated Flight Crew Shelter, Joint Base Elmendorf Richardson 9 Sustainability in Construc■ tion – Davis Constructors and Engineers Inc. for Centerpoint West Office Building and Parking Garage, Anchorage

AGC 2011 CONSTRUCTION AWARDS Coldfoot Environmental

Courtesy of Coldfoot Environmental Services Inc.

9 Davis Constructors

In the Marsh Insurance-sponsored “Excellence in Safety Awards” the following won top honors: ■ Small Contractor: Mowat Construction, Woodinville, Wash. ■ Medium Contractor: Ahtna Construction & Primary Products, Anchorage ■ Large Contractor: Granite Construction, Anchorage ■ Individual: Al Grant, Colaska, Anchorage ■ Associate Member: Anchorage Sand and Gravel Co., Anchorage AGC also announced the following winners: ■ Stan Smith Volunteer of Year: Jake Askren, First National Bank Alaska, Anchorage ■ Supplier of the Year: Arden Miller, N C Machinery, Wasilla ■ Associate of the Year: Oles Morrison Rinker & Baker LLP, Attorneys at Law

Courtesy of Davis Constructors and Engineers Inc.

The Associated General Contractors of Alaska is a 650-member statewide association for companies in the construction/contracting business including buildings, highways/utilities, heavy industrial and specialty areas. Construction is the third largest industry in Alaska, contributing more than $7 billion to the Alaska economy, and paying the second highest wages with more than 21,000 in the work force. AGC is headquartered in Anchorage with an office in Fairbanks. ❑

www.akbizmag.com • Alaska Business Monthly • December 2011

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GENERAL BUSINESS SPECIAL SECTION

Top Alaska Business Stories of 2011 From oil to film, from wind energy to tourism BY VANESSA ORR

THE ECONOMY In 2011, the news was not good for the Lower 48; unemployment was high, people were losing their homes and there wasn’t a lot of help in sight. Alaska’s economy, however, was in better shape than many of its counterparts, according to Click Bishop, commissioner of the Alaska Department of Labor and Workforce Development. In the October issue of Alaska Economic Trends, the most recent numbers for the state from August 2011 showed that Alaska’s unemployment rate remained at 7.7 percent for the second month in a row, compared to the U.S. rate of 9.1 percent. The unemployment rate was the same as in August 2010, and was the 19th lowest in the nation. Since August 2010, the state added 6,000 jobs for a total of more than 352,000 jobs. In July 2011, the city of Anchorage reported an additional 1,200 more jobs compared to the same time the year before, with unemployment averaging 6.5 percent for the first quarter of the year. OIL AND GAS Denali Alaska Pipeline Shut Down Citing a lack of customer support, in May 2011, Denali-The Alaska Gas Pipeline pulled the plug on its North Slope gas pipeline project. The 34

Photo courtesy of The Pebble Partnership

011 was a turbulent year for Alaska and for the nation as a whole. Big projects got cancelled, new ones got under way, and no one knew what the stock market was going to do from one day to the next. Not surprisingly, some of the state’s biggest stories revolved around oil and gas – but the mining, energy, telecommunications and tourism industries also made headlines. Following is a roundup of some of the biggest business stories to make the news in 2011.

During 2011, temporary facilities were constructed at the Pebble deposit area.

company, owned by subsidiaries of BP and ConocoPhillips, had already invested more than $165 million in the project before deciding not to continue based on poor open season efforts. According to Denali’s President Bud Fackrell, the company was unable to secure the financial commitments necessary to advance the project. Market changes, including the development of shale gas resources in the North American gas market, also influenced Denali’s decision to shelve the project. Point Thomson Battle Still Under Way Natural gas condensate may someday flow from Point Thomson west, but its route is currently diverted through the Alaska Supreme Court. In 2005, the State Department of Natural Resources began trying to break up the Point Thomson unit on Alaska’s eastern North Slope, a decision that would affect Point Thomson unit operator ExxonMobil, as well as

major stakeholders Chevron, BP and ConocoPhillips. ExxonMobil alone has pledged to create a $1.3 billion development that will produce 10,000 barrels a day of natural gas condensate, and has applied for a right-ofway to lay a new $80 million, 22-mile pipeline from Point Thomson to the Badami pipeline. In January 2010, a judge reversed the DNR’s termination of the Point Thomson unit, which the State then appealed. The case is now in front of the Alaska Supreme Court, with both the State and ExxonMobil having filed opening briefs and reply briefs, respectively. In June, Chevron filed a motion to have the court strike part of DNR’s opening brief citing that State lawyers had improperly raised a third legal question for the court to consider, and on June 24, a Supreme Court justice ruled in favor of Chevron. According to the Anchorage Daily News, in August, Dan Sullivan, commissioner of the Alaska Department of Natural Resources, told a legislative

www.akbizmag.com • Alaska Business Monthly • December 2011

committee that the State and ExxonMobil had reached a “resolution in principle” on terms to settle the legal conflict, though the terms of the settlement are confidential. The oil companies and the state have been negotiating for more than a year. More Exploration Taking Place on North Slope There is some good news for Alaska’s natural resources industry this year – exploration is up on the North Slope, thanks in part to a number of newcomers who are intent on making a name for themselves on the Last Frontier. In March 2011, Repsol, Europe’s fifth-largest oil company and one of the 10th largest oil companies in the world, announced an exploration joint venture with Armstrong Oil & Gas subsidiary 70 & 148 LLC, and GMT Exploration LLC, to explore and develop an area of roughly 2,000 square kilometers on the North Slope. According to Kristian Rix, deputy director for Media Relations for Repsol, the company has agreed to an investment

commitment of at least $768 million, with exploration beginning this coming winter, and may make further investments depending on the outcome. Great Bear Petroleum LLC, based out of Austin, Texas, hopes to launch an aggressive program that supports 250 wells per year for 20 years, starting in 2013. The company estimates that it can deliver a minimum oil production rate of approximately 150,000 barrels of oil per day with a significantly higher peak production rate. Beginning in October, the company planned to drill up to three vertical wells from existing gravel features along the Dalton Highway about 20 to 35 miles south of Prudhoe Bay. At the time of this article, Linc Energy, an Australian independent, was planning to drill a minimum of four wells at the undeveloped Umiat oil field in the Brooks Range Foothills, and Brooks Range Petroleum planned to complete and test its North Tarn No. 1 A well. Depending on the results, the company could decide to drill two more wells in the area.

Bills Introduced to Expedite OCS Exploration In March 2011, Rep. Bill Flores of Texas introduced HR 1115, otherwise known as the Expedited Offshore Permitting Act of 2011 to the 112th Congress. This bill, which has since been referred to the Subcommittee on Energy and Mineral Resources in the House Committee on Natural Resources, is designed to speed up the time that it takes for companies to receive approval or disapproval of permit applications. In general, the bill would amend the Outer Continental Shelf Lands Act to require a decision on any application for a permit for drilling a well under an approved exploration or development plan for an oil and gas lease, or any application to amend a previously approved permit under such a lease, within 30 days after its submission. Additional information could be requested from applicants, but must be requested within 30 days after submission of the application, and decided upon within 15 days of receipt of the information. In a related story, in April 2011, U.S.

Congratulations Carol Gore President/CEO Cook Inlet Housing Authority

National Association of Housing and Redevelopment Ofﬁcials 2011 M. Justin Herman Memorial Award Recipient Cook Inlet Housing Authority and its Board of Commissioners would like to congratulate President/CEO Carol Gore for being awarded the M. Justin Herman Memorial Award, which acknowledges, on a national level, her contribution as a driving force in building and strengthening healthy, diverse and thriving communities in Alaska.

Through partnership with many organizations and businesses in our community, Cook Inlet Housing Authority has developed: • 307 units of affordable family rental housing

Creating housing opportunities that empower our people and build community.

• 419 units of affordable senior rental housing • 62 affordable homes for immediate homeownership Our work continues, as we focus on creating additional affordable housing options for Alaska’s workforce and seniors. Thank you for your support.

www.cookinlethousing.org

Innovation. Leadership. Excellence.

www.akbizmag.com • Alaska Business Monthly • December 2011

Sen. Mark Begich called for the creation of a federal coordinator for Arctic outer continental shelf drilling who could expedite applications through the bureaucracy. The Outer Continental Shelf Permit Processing Coordination Act (S.843) directs the Secretary of the Interior to establish three regional joint Outer Continental Shelf lease and permit processing coordination offices, one for the Alaska region of the OCS, one for the Atlantic region and one for the Pacific region. The bill is currently in the Committee on Energy and Natural Resources.

Escopeta Oil Company Drilling in Cook Inlet In September 2011, Escopeta Oil Co., a Houston-based oil and gas company, began drilling at its KLU No. 1 exploration well in Cook Inlet. The well, which is being drilled with the Spartan Drilling Co.’s Blake 151 jackup rig, is the first to be drilled in the deeper waters of Cook Inlet with a jack-up rig since the 1980s. However, the project has not been without issue. On October 13, U.S.

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Customs and Border Protection levied a $15 million fine against the company for violating the federal Jones Act by using a foreign-flagged vessel to transport the jack-up rig from Texas. The Jones Act requires that American-built and operated vessels move cargo between U.S. ports. According to Escopeta spokesman Steve Sutherlin, at the time of this article, the company was reviewing its options. The company has 60 days to appeal the fine under Customs’ regulations. In mid-October, Escopeta was also given the go-ahead by the Division of Oil and Gas to resume drilling its exploration well after its casing and blowout-preventer equipment had been successfully tested. The company had been asked to halt drilling at 5,000 feet in September, and is now permitted to continue drilling to its planned depth of 16,000 feet.

ANCSA 40TH ANNIVERSARY December 18 marks the 40th anniversary of the Alaska Native Claims Settlement Act, or ANCSA, legislation that affected every Alaskans’ way of life. For the past year, numerous events have marked the passing of this legislation which was signed into law by President Nixon in 1971. The largest land claims settlement in U.S. history, ANCSA resulted in the creation of 12 Alaska Native regional corporations and more than 200 local village corporations. A 13th regional corporation was later created for Alaska Natives who no longer resided in the state. The settlement also paved the way for the 800-mile long trans-Alaska oil pipeline, changing Alaska’s economy forever. To honor this historic event, the ANCSA@40 committee, in conjunction with the Alaska Humanities Forum and Alaska Native corporations, held a number of panel discussions to provide education on the many facets of ANCSA. These included discussions on Alaska Native corporations entering the global market; the role of women in the development of the Act; ANCSA and the pipeline; and a discussion about Howard Rock’s role in ANCSA history.

www.akbizmag.com • Alaska Business Monthly • December 2011

MINING Restarting the Healy Clean Coal Project In 2009, Golden Valley Electric Authority (GVEA) and the Alaska Industrial Development and Export Authority (AIDEA) worked out a settlement for the Healy Clean Coal Plant. AIDEA agreed to sell GVEA the plant for $50 million, with AIDEA loaning Golden Valley $45 million to cover plant startup and system integration costs. In October 2011, GVEA was continuing to negotiate with the Environmental Protection Agency (EPA) over the approval of air permits. According to Brian Newton, president and CEO of GVEA, once this process is finished, the company will proceed with a tentative agreement with the State to purchase the plant, correct any known deficiencies and get it operational. He estimates that it will take between 18 and 24 months to accomplish the known repairs. Once the plant is operational, GVEA members are expected to see a reduction in rates of one cent per

kilowatt hour, or roughly a $6 to $7 savings per month for the average GVEA member.

Photo courtesy of GVEA

In October 2011, Golden Valley Electric Association was continuing to negotiate with the Environmental Protection Agency (EPA) over the approval of air permits in order to re-open the Healy Clean Coal Plant.

The Pebble Mine Controversy The Pebble deposit, which is located roughly 200 miles southwest of Anchorage, has one of the largest concentrations of copper, gold, molybdenum and silver in the world. The mine is expected to hold 80.6 billion pounds of copper, 5.6 billion pounds of molybdenum, 107.4 million ounces of gold and commercially significant amounts of silver, rhenium and palladium. However, a recent vote in the Lake and Peninsula Borough has raised some legal issues that may affect the status of the mine. In October, certified results of a vote taken by Lake and Peninsula Borough residents showed they were in favor (280 to 246) of banning largescale resource extraction activity that would destroy or degrade salmon habitat. The Pebble Mine is close to Iliamna Lake, the largest producer of sockeye salmon in the world. The Pebble Limited Partnership had originally tried to stop the vote, saying the

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www.akbizmag.com • Alaska Business Monthly • December 2011

measure sets up an illegal law, but a State court judge refused, and the case was put on hold until Nov. 7. The State of Alaska filed a constitutional challenge Oct. 28 in Anchorage Superior Court against the new Lake and Peninsula Borough ordinance. “This case is not about State support for or against a Pebble Mine project,” Alaska Attorney General John Burns said in a State press release “It is about upholding the State’s constitutional authority and responsibility to evaluate whether, on balance, development of Alaska’s resources is beneficial to all Alaskans. This administration has consistently maintained that the State will not sacrifice one resource for another. In the case of Pebble, we haven’t yet even considered the pros and cons of any development that may be proposed. But the Alaska Constitution requires the State – not the borough – to fairly and completely conduct this evaluation.”

COMMUNICATIONS TERRA-SW Project Connects Rural Communities On Oct. 17, GCI announced that it had completed construction on TERRA-Southwest (TERRA-SW), an ambitious project to connect 65 communities in Southwest Alaska with the rest of the world. The project, which was funded with an $88 million loan/grant combination from the U.S. Department of Agriculture’s Rural Utilities Service Broadband Initiatives Program as part of the American Recovery and Reinvestment Act, extended terrestrial broadband service to Bristol Bay and the YukonKuskokwim Delta. GCI completed the broadband connection between Homer and Bethel one year ahead of schedule, which included 400 miles of fiber optic cable and 13 microwave towers. With the completion of the project, broadband service is now available to more than 9,000 households and nearly 750 public, nonprofit and private community institutions. In November, GCI began moving its existing customers like health corporations and schools to the TERRA-SW network, with service becoming available to residential customers in 2012. 38

www.akbizmag.com • Alaska Business Monthly • December 2011

Photo courtesy of GCI

ENERGY Eva Creek Wind Project In June 2011, the board of directors of Golden Valley Electric Association (GVEA) approved the Eva Creek Wind Project, which will become the largest wind project in Alaska and the first by any Railbelt utility. The 24-megawatt project, with a total of 12 turbines, will meet the com-

▼

A fiber trench being dug near Igiugig, Alaska, for GCI’s TERRA-SW project.

pany’s goal of having 20 percent of their system’s peak load generated by renewable resources by 2014. According to Brian Newton, president and CEO of GVEA, the company received its final permits from the Department of Natural Resources (DNR) in October, and signed formal agreements to purchase the wind turbines. At the time of this article, GVEA was upgrading

existing State roads to the turbine site to accommodate the transportation of components. The project is expected to become operational in September 2012. Chugach Electric to Purchase Fire Island Wind Power Wind power was making big headlines in 2011, not only with GVEA’s decision to go ahead with the Eva Creek Wind Project, but also with Chugach Electric Association’s decision to buy Fire Island wind power beginning in 2013. The Fire Island Wind Project, which is already under construction, is owned by Fire Island Wind LLC, a wholly owned subsidiary of Native Corporation CIRI. On Oct. 11, the Alaska Regulatory Commission approved the power purchase, and construction, including shore side transmission work, is now under way on the first phase of the 11-turbine wind farm near Anchorage. In April 2012, on-island construction will begin and the wind turbines are expected to become operational in July with power generation beginning in September 2012. Once completed, the

www.akbizmag.com • Alaska Business Monthly • December 2011

turbines will be capable of generating up to 17.6 megawatts of power. The project is currently budgeted at $65 million for on-island infrastructure and another $25 million for transmission to connect the wind project to Chugach’s electric system. Susitna Hydroelectric Project On July 13, Gov. Sean Parnell signed Senate Bill 42, a bill authorizing the Susitna-Watana Hydroelectric Project. The 700-foot-tall dam and power generating and transmission facilities are estimated to cost $4.5 billion and be completed in 2023. When completed, the plant will have an installed capacity of 600 megawatts and can supply approximately 50 percent of the projected needed power for Southcentral Alaska. At press time, the Alaska Energy Authority was planning to formally apply for a license with the Federal Energy Regulatory Commission and had just hired Wayne Dyok as lead project manager for the project. The permitting process is expected to take six years and will cost more than $160 million.

TOURISM AND FILM Cruise Ship Passengers Decrease At first it looked like good news: reports said that the number of cruise passengers to Alaska was expected to increase in 2011 to 887,000 visitors; an increase of 7,000 passengers over 2010. But at the end of September when the preliminary figures came in, the numbers were lower than expected. According to John Binkley, president of the Alaska Cruise Association, 870,000 passengers took cruises to Alaska in 2011, compared to 878,000 in 2010. The state lost two ships in 2011, the Ryndam and the Royal Princess, but gained the Crystal Symphony, Disney Wonder, Oceania Regatta and Silversea Sea Shadow. Princess will add another ship in 2012. As a result of the lowering of the State’s tax on cruise passengers, estimates for 2012 have put passenger numbers at 950,000 visitors. Film Industry Booms in Alaska You can’t turn on the TV without seeing some kind of show about Alaska from Deadliest Catch to Ice Road Truckers to Ax Men. And that trend looks to

continue as more and more television producers, and now filmmakers, find that there are viewers to be found when featuring the Last Frontier. Since the State film production tax credit went into effect in 2009, communities all over the state have benefited from the influx of TV and film projects. The incentive program offers up to a 44 percent transferable tax credit to companies filming in Alaska with a minimum $100,000 budget. Additional percentages are given for local hire, off-season production and filming in rural areas. Big Miracle, originally titled Everybody Loves Whales, filmed in fall 2010, mostly in and around Anchorage, had an estimated $30 million budget; Man vs. Wild spent $223,000 on a single episode. With this kind of money at stake, Sen. Johnny Ellis recently introduced Senate Bill 23 during the legislative session to extend the tax credit program another 10 years, despite the fact that it doesn’t expire until July 2013. The bill made it from the Senate to the House Finance Committee before the Legislature adjourned ❑ from its regular session.

www.akbizmag.com • Alaska Business Monthly • December 2011

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Club 49 Terms and Conditions: Membership Eligibility: You must be a state of Alaska resident, or a member of military personnel permanently stationed in Alaska to join Club 49. Membership Benefits: Checked Baggage Waiver: Members are eligible for two free checked bags for themselves on flights operated by Alaska Airlines, Horizon Air, PenAir between Anchorage and Dutch Harbor, and SkyWest Flight Series 3450-3499. To qualify for the Club 49 checked bag benefit, the member’s Mileage Plan number must be in the reservation. The Club 49 checked baggage waiver is not available when checking in with a codeshare or airline partner. Travel Now Discount: Club 49 members are issued two Travel Now Discount Codes upon successful enrollment, and then again annually once membership eligibility is revalidated. Travel Now Discount Codes may only be redeemed at alaskaair.com. Each Travel Now Discount Code is valid for 30 percent off of one-way travel in a Full-Flex (Y) fare for the Club 49 member. Travel Now Discount Code is not transferable. Travel must include one Alaska city and take place within four days of ticket purchase. Benefits can be applied for travel on 11/1 or later. Full terms and conditions can be found at alaskaair.com/club49.

TRANSPORTATION

CARGO DISTRIBUTION MAP

90% of merchandise goods enter the Port of Anchorage from Tacoma, Washington.

Incoming fuel, cement and other cargo from west coast and foreign sources.

www.akbizmag.com • Alaska Business Monthly • December 2011

Photos by Susan Sommer

Container Shipping Alaska’s consumer lifeline BY SUSAN SOMMER

Containers are unloaded from the Horizon Kodiak at the Port of Anchorage.

ne glance around a typical Alaska office or home reveals a startling fact: Nearly everything arrived from somewhere else by container ship. Every computer, desk, table, refrigerator; every automobile, spare tire, snow shovel, set of skis; every banana, box of cereal; even every nail and piece of duct tape holding things together. Most of the state’s goods arrive via the Port of Anchorage, which “provides an estimated 90 percent of the merchandise goods used throughout 85 percent of Alaska’s populated areas,” according to Steve Ribuffo, deputy director of Alaska’s largest port.

PORT OF ANCHORAGE IS STATE’S LIFELINE Only two companies, Horizon Lines Inc. and Totem Ocean Trailer Express Inc. (TOTE), ship containerized goods to Alaska via the Port of Anchorage. Horizon Lines was formerly SeaLand, and started using the port just after the 1964 earthquake. TOTE has had a partnership with the port since 1975. Both companies subcontract to freight forwarders, such as Lynden, Span Alaska and Carlile, among others, to transport those goods to their final destinations along Alaska’s road system. The Alaska Railroad Corp. is also a major player in hauling containerized shipments from the state’s ports to Railbelt communities. A much smaller percentage of goods are hauled to rural Alaska by air and barge.

MAP KEY ● Port of Anchorage ● Major Hubs ● Communities Served

Most of Alaska’s consumer goods arrive via the Port of Anchorage. Map courtesy of the Port of Anchorage

According to a 2011 Port of Anchorage cargo distribution study, almost all of the container goods that make up the day-to-day items that Alaskans use travel in shipments from the Port of Tacoma and are brought to the Port of Anchorage (POA). Many of Alaska’s consumer goods originate in Asia before transiting Tacoma’s port. These shipments represent a “critical lifeline for Alaska” and amount to nearly 30 percent of Tacoma’s total cargo activity. The total annual value of these goods is estimated to be well over $1 billion. The Port of Tacoma lists Alaska as its third largest two-way trading partner of 2010, topped only by China/Hong Kong and Japan. Containers are part of a larger network of goods arriving via the Port of Anchorage, which also transfers vehicles, military deployments, cement shipments and petroleum products, such as gasoline, jet fuel, heating oil, etc. More than 4 million tons of cargo move each year through the port, which is self-sustaining through tariffs and fees rather than tax dollars. Nearly all of the consumer goods and business supplies for Fairbanks, Mat-Su and the Kenai Peninsula first enter through the Port of Anchorage, including approximately 52,000 automobiles per year being shipped one direction or the other. Each container is equipped with an RFID label for easy tracking during its trip. Four container ship dockings per week, on Sundays and Tuesdays, supply Alaskans with most of their

www.akbizmag.com • Alaska Business Monthly • December 2011

SIDEBAR

Malcom McLean The father of containerization BY SUSAN SOMMER

orn in 1914 to a North Carolina farming family, Malcom McLean started his own trucking company at age 20 to transport farmers’ goods and supplies. Throughout the next few years, he learned how much time it took for dock laborers to load and unload individual items by hand. McLean envisioned a system in which his trucks could simply be lifted onto the ship, make their journey to a destination, then lifted off and driven to wherever they needed to go. World War II saw this practice enacted, and in the early 1950s, McLean decided to try it for commercial gain. He developed the metal shipping container, sans truck chassis, to save space on ships, in 1956 and changed the way consumer goods were shipped worldwide. McLean then sold his trucking company to pursue maritime shipping. His new company was the precursor to the former SeaLand domestic services, which now operates as Horizon Lines Inc. McLean’s containerization process increased shipping productivity on a grand scale, lowering the cost of imported goods. Shipping became cheap enough for industry to set up factories in far-flung locales where labor cost less, meaning consumers could buy a wide array of low-cost products from around the world. McLean continued to be an innovator and inventor throughout his life. In 2000, he was named Man of the Century by the International Maritime Hall of Fame. He died the following year. ■

www.akbizmag.com • Alaska Business Monthly • December 2011

consumer goods and business supplies, all of which are packed into 600 or so containers per ship, for a total of about 10,000 per month. More than 1.8 million tons of container goods transit the port every year. Generally, ships take about 70 hours to voyage from the Port of Tacoma to the Port of Anchorage, though the trip can take longer if seas in the Gulf of Alaska are rough. Rarely, containers are lost overboard. Should a major disruption to service occur, most of the stateâ&#x20AC;&#x2122;s retailers, nonprofits and government agencies would be out of supplies within two weeks. â&#x20AC;&#x153;I cannot emphasize how important this port is to the average Alaskan, and yet no one gives it a second thought,â&#x20AC;? says Ribuffo. And as so eloquently said by the authors of the above mentioned port study, â&#x20AC;&#x153;This silent, steady system is what keeps Alaskaâ&#x20AC;&#x2122;s economy alive, itâ&#x20AC;&#x2122;s what keeps food in the house and pencils on the desks.â&#x20AC;? TOTE offloads their cargo via rollon/roll-off, or RO/RO, facilities while Horizon Lines uses a lift-on/lift-off, or GM6* ;'#4 1( '/219'4+0) ;170) 2'12.' 61 190 6*'+4 '%101/+% 57%%'55

Trucks line up to haul containers being lifted off the Horizon Kodiak at the Port of Anchorage.

LO/LO, system comprised of three 38-foot gauge container cranes. The RO/RO method is typically faster than using cranes. Port of Anchorage upgrades are expected to increase efficiency in part by providing farther

reaching cranes, deeper draft for container ships and a nearby railroad intermodal loading facility. With so many players working the transport of goods, staying organized is key. â&#x20AC;&#x153;There are lots of hard-working

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ December 2011

people and massive communication for this all to work smoothly,” says Phil Pandres, who works as an in-town Anchorage truck driver for Weaver Bros. Inc. The Aleutians region, too, receives container cargo via the Port of Anchorage. Horizon Lines offers direct container service to Kodiak and Dutch Harbor/Unalaska. Ships carry cargo from the Port of Tacoma, discharge most of their cargo in Anchorage, take on additional cargo for Kodiak and Dutch Harbor and then return to Tacoma after making those port calls. In addition, they take frozen fish from Southcentral and Kodiak to Dutch Harbor where it is loaded onto container ships headed for foreign destinations. Frozen Alaska-caught fish from Kodiak and Dutch Harbor are also backhauled to Tacoma for distribution to domestic markets. Once the containers are unloaded in Anchorage, they return southbound at only about 20 percent capacity; most often, the cargo consists of autos (privately owned, trade-ins and those from rental car fleets) and

household goods of people moving out of state, as well as frozen Alaskacaught seafood and recyclables.

RAIL DISTRIBUTION OF CONTAINER GOODS Besides distributing goods that arrive via the Anchorage port, the Alaska Railroad Corp., or ARRC, also maintains rail service for containers arriving from Seattle in Whittier and Seward. Containers are one of the three most common types of conveyances used in intermodal freight on the Alaska Railroad, though only about 12 percent of the company’s freight revenue comes from the instate transport of containers. Efficiency is one reason cited for choosing rail-over-road transport of goods. “A train can haul a ton of freight several hundred miles farther on a gallon of diesel than can a truck,” says Steve Silverstein, ARRC vice president of business development. “A large percentage of the freight that moves inland goes via rail because we are more efficient. It’s a value that translates into lower cost for customers and

consumers.” Nearly all of ARRC’s container capacity is from wholesalers shipping large loads of goods.

SEATTLE SHIPS TO SOUTHEAST Southeast Alaska, being much closer to Seattle and off the road system, receives its goods directly from the Port of Seattle. Juneau, Ketchikan, Petersburg and Sitka see twice-weekly barge service by Alaska Marine Lines, one of many Lynden companies. Alaska Marine Lines also delivers containers once a week to Haines, Skagway, Wrangell, and a handful of other Southeast communities. Seasonal barge service is available to smaller towns like Angoon, Yakutat and others. While the system is the same for container shipping in Southeast as in the rest of the state, travel times are shorter and the chance for ships encountering rough seas is much lower since they aren’t crossing the Gulf of Alaska.

RATS, STOWAWAYS AND CABINS Unlike many worldwide shipping locations, Alaska’s ports have yet to encounter rats on any of its regularly

www.akbizmag.com • Alaska Business Monthly • December 2011

CONTAINER SHIPPING’S FUTURE IN ALASKA Both Horizon Lines and TOTE are committed to serving Alaska’s

Photo by Susan Sommer

scheduled container ships or inside containers. Stowaways have never been a problem either. Cold winter temperatures and summer heat are challenges easily met in Alaska’s container shipping industry. For example, Span Alaska, a freight forwarder with statewide service, offers “Keep From Freezing” service from September through April. On the flip side, refrigerated containers, or “reefers,” are widely used by all entities for keeping fresh food and other temperature-sensitive items properly chilled but not frozen during transport. Alaska also has some unique uses for containers not in service for shipping, including cabins, storage sheds, job-site offices, generator shacks and containment of hazardous or chemical materials. Modifications to these waterproof and weatherproof boxes can be made such as lighting, doors and windows, insulation, ventilation and security.

Shipping containers at the Port of Anchorage.

container shipping needs through current technology, use of ships that can withstand the rigors of Alaska waters and environmental awareness. A serious challenge to container shipping in Alaska would be the introduction of a container tax. Washington and California have both in the past proposed container taxes that would provide funding for transportation projects in their states. Since the bulk of Alaska’s cargo arrives by container, the state would be “unfairly burdened”

with such fees, says the Port of Anchorage. When those taxes were proposed, the State of Alaska and the Alaska transportation industry vigorously opposed the measures; the proposals were defeated. It remains an issue of concern. Arctic shipping has been a topic of debate as polar ice melts. The idea of shorter shipping distances and new markets are attractive to a myriad of business interests, but the likelihood of container shipping routes to and from Alaska changing anytime soon is slim. ❑

SPAN ALASKA’S SERVICE means we all sleep easy.

..... Span has a great attitude toward taking care of us. They make it their personal business to follow through on everything and make sure we get what we need when we need it. Obviously, we’re very customer service oriented here at the Cook – and so are they. – Glenn Specking, Chief Building Engineer, Hotel Captain Cook

SHIPPING TO ALASKA? CALL. 1.800.257.7726 www.spanalaska.com

promises made, promises delivered

Glenn Specking, Chief Building Engineer, Hotel Captain Cook

www.akbizmag.com • Alaska Business Monthly • December 2011

TOWNS

TRANSITION

BY TRACY BARBOUR

Photo courtesy of Hecla Green Creek Mining Co.

Greens Creek loadout facility in Hawk Inlet, Admiralty Island, where concentrates are loaded and shipped to smelters.

Juneau Alaska’s capital city faring well

uneau has a fairly diverse and thriving economy compared to many other places in Alaska. The economic system of Alaska’s capital city is bolstered by a long natural resources legacy fueled in great part by mining and fishing. Juneau’s role as a social services hub and its ample supply of steady government jobs help to keep the economy strong, said to Mali Abrahamson, an Alaska Department of Labor economist who focuses on Southeast Alaska. In fact, she says Juneau’s abundance of local, State, federal and tribal jobs are an important part of what makes its economy so diverse. “Within government employment, there’s such

an array of occupations, from managing the PFD to being a deckhand on a boat,” Abrahamson said. The government is the largest employer for the city and borough of Juneau, representing more than 40 percent of jobs compared to 25 percent for government employment statewide. The impact of government employment is extremely significant for Juneau. “All of those workers have to buy goods and services, rent houses and send their kids to school,” Abrahamson said. “That’s really important for the demand in the local economy.” Employment in Juneau and the rest of Southeast Alaska took a hit in 2009.

The city experienced a 3.4 percent decrease – 627 jobs – in total employment almost exclusively in the private sector. The job loss wasn’t as bad as in other parts of Alaska or other states because it was dampened by the strong government component. But Juneau’s employment numbers rebounded between 2009 and 2010, growing by 404 jobs. Of those gains, 252 jobs were in the private sector. This year, it was a different story, according to Brian Holst, executive director of the Juneau Economic Development Council ( JEDC). “We don’t have full numbers for 2011 yet, but we anticipate that government

www.akbizmag.com • Alaska Business Monthly • December 2011

employment will be relatively flat,” he said in an Oct. 25 interview. Holst feels the stability of the government sector is critical to Juneau’s economy staying vibrant. But having relatively flat government employment is positive for the local economy. Overall, it’s been a good year for Juneau’s economy relative to the last few years. “Juneau, like much of Alaska has fared well during the national recession,” Holst said. “We see that the population is up, total payroll is up, housing starts are up and home values are increasing.”

BRIGHT SPOTS IN THE ECONOMY Holst says the mining industry is an absolute bright spot on Juneau’s economy. Hecla Greens Creek Mining Co., for instance, is the city’s largest private-sector employer. It directly employs 350 people, spending more than $42 million in pay and benefits, according to Human Resources and Community Relations Manager Ron Plantz. In 2010, Greens Creek accounted for $315 million in sales and $111 million in operating, capital and exploration costs. It paid local property taxes in excess of $1.3 million. As a recent development, Greens Creek has started National Environmental Policy Act (NEPA) permitting work on long-term tailings capacity options to sustain both the current lifeof-mine plan and production well into the future, according to Plantz. The Environmental Impact Statement (EIS) scoping process began in October 2010 and informed stakeholders about the proposed project, preliminary issues and preliminary alternatives. It also asked for public input on the topics and issues the scientists and engineers should focus on when writing to inform stakeholders. “That process continues to advance under the administration of the U.S. Forest Service, with the release of a draft EIS scheduled for the end of 2011,” Plantz said. The Kensington Gold Mine, which opened June 2010 about 45 miles north of Juneau last year, employs about 200 permanent, year-round workers as well as contract employees. The mine’s owner, Coeur d’Alene Mines Corp., expects to produce an average of 125,000 ounces of gold annually over Kensington’s initial 12.5 year life. Coeur Alaska

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has vowed to work closely with Berners Bay Consortium â&#x20AC;&#x201C; consisting of Klukwan, Inc., Kake Tribal and Goldbelt Native corporations â&#x20AC;&#x201C; on job training and supporting local and Native hire at Kensington. The effect of Juneauâ&#x20AC;&#x2122;s thriving mining industry goes well beyond the creation of jobs; it extends to higher average wages. The mining industryâ&#x20AC;&#x2122;s average annual wage exceeded $90,000 in 2010, Holst said. Thatâ&#x20AC;&#x2122;s significantly more than what highly paid, federal government workers make â&#x20AC;&#x201C; and double the average wage of Juneau employees. Abrahamson says the opening of the new Kensington Gold Mine has definitely put a â&#x20AC;&#x153;bumpâ&#x20AC;? in the natural resources industry as far as wages and employment goes. In 2010 alone, it increased Juneauâ&#x20AC;&#x2122;s total employment by about 100. Together, the jobs generated by the Kensington and Greens Creek mines also have an invisible effect on other industries, as companies spend money to feed and transport their workers. The presence of Juneauâ&#x20AC;&#x2122;s mines is

also impacting institutions of higher learning. For instance, University of Alaska Southeast (UAS) has purchased an underground hard rock mine training simulator to educate its students. More than 700 students are currently enrolled in mining classes at UAS. The new state-of-the-art mine simulator, which features three modules for training on different pieces of mining equipment, will provide a dramatic increase in training capacity to prepare individuals for entry-level hard-rock mining jobs in Alaska, according to UAS. â&#x20AC;&#x153;This was the missing piece of the puzzle for training miners from Alaska to be productive and safe from the first day on the job,â&#x20AC;? stated Dennis Steffy, director of the University of Alaskaâ&#x20AC;&#x2122;s Mining and Petroleum Training Services in a March 17 media release. â&#x20AC;&#x153;It will vastly improve the opportunities of students for mining employment. In addition, salaries will stay in Alaska instead of going to other western states.â&#x20AC;? The simulator can replicate the mine environment with visual displays and mapping of the underground terrain. It will be housed at the UAS

Center for Mine Training, located at Juneauâ&#x20AC;&#x2122;s UAS Technical Education Center. The simulator should be in place and operational by the last week in December, according to Mike Bell, the director of the Center for Mine Training. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re excited and looking forward to it,â&#x20AC;? he said. In addition to the mining sector, Juneauâ&#x20AC;&#x2122;s seafood industry also saw improvement this year. Holst says the industry is faring well because of the rising prices of seafood on the market. He expects 2011 to be a strong year for the seafood industry.

10 PERCENT CRUISE SHIP INCREASE But the tourism industry, which is a major driver of Juneauâ&#x20AC;&#x2122;s economy, appears to be relatively flat this year. Although the city has hosted about the same number of cruise ship passengers this year than in 2010, Holst says he expects the year to end with an uptick in independent visitors. Next year, he anticipates seeing a 10 percent increase in the number of Juneauâ&#x20AC;&#x2122;s cruise ships passengers.

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ December 2011

Like many places in the state, Juneau’s population is growing. According to Abrahamson, the 2010 census marks the third year of population recovery for Juneau, as the number of births and deaths has remained typical, but fewer people have moved out of Juneau. Its population – currently 31,275 – has grown 2 percent since the 2000 census. Abrahamson also notes that Juneau’s residents tend to be older, more educated and earn more than the average Alaskan. The higher earnings are understandable, given the city’s greater concentration of higher-paying government jobs. But it’s not as easy to explain the age demographic. Contributing factors could be the city’s lower birth rate, lower net migration and higher concentration of mature workers. “We have a lot of people that are nearing retirement age in our work force, which raises the median age,” she said. “It raises some interesting questions about where we’re going to find replacements for these retiring workers.” The city’s segment of mature workers is having a peculiar effect on wages.

Salaries are growing with the older workers, who typically earn more. This is causing wages to increase overall without jobs necessarily increasing. Holst says Juneau is attractive to seniors because it’s a comfortable place to age. The city’s health care facilities continue to improve, plus it has a very positive tax policy toward older residents. Juneau exempts seniors from paying property tax on the first $150,000 of the assessed value of their home. Also, individuals who are 65 and older and have lived in the city for at least 30 days don’t have to pay the sales tax, which is currently at 5 percent.

A HIGHER QUALITY OF LIFE Juneau residents enjoy a high quality of life, Holst says. The city, which is about 600 air miles southeast of Anchorage, is located in the beautiful Tongass National Forest. It’s a cosmopolitan place bursting with small-town appeal, natural wonders and opportunities for outdoor recreation. In fact, Juneau is listed as one of U.S. News’ Best Places to Retire. But like many communities in Alaska, Juneau is facing a number of

challenges, such as a higher cost of living, higher housing prices and scarcity of affordable housing. There simply isn’t enough housing available to purchase or rent, which has resulted in lower vacancy rates than elsewhere in the region, state and nation. Holst said: “Using a 5 percent vacancy rate to reflect a balanced and healthy market, Juneau would need more than 300 more housing units for us to have a 5 percent vacancy threshold.” However, Juneau has a number of projects in the work to improve its infrastructure. Projects include a renovation to one of the elementary schools, a new U.S. Forest Service laboratory and a runway extension at the city’s airport. Recently, the city broke ground on a new Library Archives and Museum. In addition, the Sealaska Heritage Institute is moving forward with plans to construct a new Native cultural center downtown at the corner of Front and Seward streets. The center promises to be an exciting addition to the city, as it will advance the study and preservation of Alaska Native history, culture art and language. ❑

www.akbizmag.com • Alaska Business Monthly • December 2011

HEALTH & MEDICINE

Alaska’s Hospitals Rise to Their Challenges

Photo courtesy of Providence Health and Services Alaska

Providence Alaska Medical Center offers a wide spectrum of care.

Mission statements show vision for Alaska’s growing health needs BY DEBORAH JEANNE SERGEANT

ust like members of any community, each member of Alaska’s health care community has its own strengths and challenges. But the community’s diversity enables it to provide a more comprehensive range and efficiency of care.

PROVIDENCE Providence Health & Services Alaska (www.providence.org) states its mission: “As people of Providence, we reveal God’s love for all, especially the poor and vulnerable, through our compassionate service” although service is provided for all who seek care. The organization was founded more than 100 years ago when the Sisters of Providence brought health care to Nome. Today, Providence serves people in Anchorage, Kodiak, Seward, Valdez, Eagle River, the Mat-Su and Soldotna. The state’s largest hospital, 371-bed Providence Alaska Medical Center offers Adult Critical Care, Behavioral

Health Services, The Children’s Hospital at Providence, The Providence Cancer Center, Emergency Department, Heart & Vascular Center, Imaging Services, Laboratory Services, LifeMed Alaska Air Ambulance, Maternity Center, Neuroscience Services, including a Sleep Center, an Advanced Primary Stroke Center and REACH telestroke program, Orthopedic Services and Surgery Services. Providence’s current project will expand and modernize areas related to prenatal and birthing, the cardiac surgery program, surgical services and some support services, all by 2014. The changing health care environment, influenced by health care reform and an aging population, presents one of Providence’s biggest viability challenges. Helping patients become more responsible for their own health is part of the solution, along with promoting wellness-based health care. “We remain privileged to carry on the

Mission of the Sisters of Providence,” said Bruce Lamoureux, chief executive officer. “Our commitment to excellence and compassionate care will continue to guide us through the challenges and opportunities we face in the future.”

ANTHC The mission of Alaska Native Tribal Health Consortium (www.anthctoday. org) based in Anchorage is “to achieve status as the healthiest people in the world for Alaska Natives, to provide excellent care in a hospital setting while simultaneously working with regional health care offices to meet the medical needs in the Bush and to work in a collaborative team environment to make sure preventive and proactive needs are addressed.” Primarily serving Natives, ANTHC was founded in 1997 and is owned by Alaska Natives through tribal governments and regional nonprofit organizations.

www.akbizmag.com • Alaska Business Monthly • December 2011

ANTHC operates the only certified Level 2 trauma system in the state, along with auxiliary patient services, diabetes program, emergency department, cancer care, otolaryngology, respiratory therapy and surgery. Fiona Brosnan, representing the organization, said ANTHC’s strengths are its “highly dedicated medical team” and that “it’s a magnet designated for nursing staff, top-notch ancillary services and the support staff hospital-wide.” ANTHC recently built a $12.3 million addition to its maternal/child health program. It is developing a medical office building to increase access to tertiary care providers, and assessing and evaluating the expansion of in-patient and out-patient facilities, changes that should help insure coordination of care. “It makes or breaks us each day because so many variables affect patients’ ability to arrive from the Bush,” Bronson said. Sufficient revenue, exacerbated by declining insurance reimbursements and increasing costs, presents another challenge. ANTCH also competes with non-Native hospitals, which may have

facilities equal to or better than its. “We’re updating our facilities, updating our programs and bringing our customers back whenever possible,” Bronson said.

ALASKA REGIONAL Alaska Regional Hospital’s (www.alaska regional.com) simple mission is “To be a caring partner, improving health for life.” ARH has served both Anchorage residents and patients from all over the state for more than 40 years, when founded as Anchorage Presbyterian Hospital. Today, the 250-bed ARH offers inpatient and outpatient services, including heart surgery and cardiovascular services, an orthopedic and spine center, the surgical services, cancer resources and a neuroscience center that includes neurological diagnostic imaging, interventions and neurosurgery. The facility was rated in U.S. News and World Report’s “2010-2011 Best Hospitals” study as the 47th best hospital in the country for orthopedics – the only hospital in Alaska to make the list.

Additionally, HealthGrades, an independent health care ratings organization, has ranked ARH as No. 1 in the state for total joint replacements since 2007 and No. 1 for overall orthopedic services since 2009. Recruiting challenges ARH, especially for highly sought-after positions in the specialized nursing areas. “There are a lot of misconceptions about what it’s really like to live in Alaska,” said Annie Holt, CEO, adding that the stereotypes can add to recruiting challenges. “Our top priority is providing safe, high-quality care,” Holt continued. “We continue to honor this commitment by investing in the best minds in the industry and the newest technologies. We are working to maintain our success in the areas where we are listed as being best in Alaska, but are also looking for areas in which we can grow our services.”

CENTRAL PENINSULA GENERAL Central Peninsula General Hospital (www.cpgh.org) is “dedicated to promoting wellness and providing highquality care that ensures the confidence

www.akbizmag.com • Alaska Business Monthly • December 2011

Photo courtesy of Fairbanks Community Hospital

A community recruiting collaborative, including to Fairbanks Memorial Hospital (pictured), has resulted in 70 new physicians coming to Fairbanks in the last five years.

and loyalty of our customers,” said Rick Davis, chief operating officer. CPGH serves the Central Kenai Peninsula area from Cooper Landing south to Anchor Point: approximately 35,000 people. It’s come a long way since 1964 when a community meeting of homesteaders initially discussed the possibility of an area hospital which led to the hospital opening in 1971. The organization includes Central Peninsula Hospital, Serenity House (a residential treatment center), Heritage Place (a continuing care facility), and eight physician practices in the following specialties: family practice (3), neurology, pain management, general surgery, orthopedics and women’s health. LifeMed air ambulance service provides emergency medical care for the entire region. The medical staff and allied medical staff specialties include anesthesia, emergency medicine, family medicine, ENT, general surgery, internal medicine, OB/GYN, ophthalmology, orthopedics, neurology, gynecology, obstetrics, pathology, podiatry, psychiatry, urology and radiology. An 85,000-square-foot expansion and renovation project has added and improved facilities for private patient

rooms and many hospital services. Like many hospitals, CPH’s challenges include preparing for the potential of large revenue declines related to health care reform in the coming years. The hospital also wants to improve its Quality of Care rating scores as measured by the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), Clinical Care effectiveness scores (process of care measures), and Employee Engagement scores.

FAIRBANKS MEMORIAL Fairbanks Memorial Hospital and Denali Center (http://www.bannerhealth. com) states, “We exist to make a difference in people’s lives through excellent patient care” as its mission. The hospital serves Native and military communities from the North Slope to the Alaska range and east from the Canadian border and west to the Bering Sea. Founded more than 30 years ago, FMHDC is owned by the people of Fairbanks through the Greater Fairbanks Community Hospital Foundation and operated by nonprofit Banner Health. FMHDC is a 242-bed integrated

health system that offers emergency, general medical, cardiology, surgical and critical-care services. FMHDC provides same-day outpatient surgery, cardiac rehabilitation, radiology services, long term and dementia care, pain treatment, cancer care, diabetes center, sleep disorders lab, physical therapy, occupational therapy and speech therapy, home care services and home medical equipment. “The chief strength of FMHDC is the culture of community centeredness …,” said Mike Powers, CEO. “(This) translates to … the best patient outcomes and an experience beyond the patients’ expectation.” FMHDC offers such a broad scope of specialties by partnering with a variety of physician groups. FMHDC focuses on medical staff recruitment, not just for the hospital, but for community partners, too. A community recruiting collaborative has resulted in 70 new physicians coming to Fairbanks in the last five years. FMHDC also promotes professional growth and development of staff internally and with its partners in health care. “As these programs experience funding shortfalls and enrollment shifts, the long-range impact may be staffing shortages,” Powers said. As with the other health care facilities mentioned, FMHDC faces financial challenges along with rising needs. “FMHDC acknowledges the need for additional local resources for hospice, assisted living, vascular diseases and emergency psychiatric care,” Powers said. “As FMHDC appraises its capacity to meet these emergent needs, the mission to be an innovative leader in health care in Alaska will be paramount.”

SEARHC At SouthEast Alaska Regional Health Consortium (www.searhc.org), the mission is “to provide the highest quality health services in partnership with Native people.” The Sitka-based, nonprofit tribal health consortium consists of 18 Native communities that serve the Tlingit, Haida, Tsimshian and other Native people of Southeast Alaska. SEARHC is one of the oldest and largest Nativerun health organizations in the nation.

www.akbizmag.com • Alaska Business Monthly • December 2011

In addition to the 27-bed hospital, SEARHC offers out-patient health, optometry, dental, physical therapy, behavioral health, substance abuse residential programs, health promotions and more. “It’s a regional hospital, so it’s the referral point where the regional clinics, especially the Native patients, get sent for advanced testing,” said Charles Bingham representing the organization. “We’ve tried to bring a lot of our services into the community so people don’t have to travel for them. We’re one of the few tribal health hospitals that has a fully staffed surgical program, generalists and specialists.”

BARTLETT REGIONAL Bartlett Regional Hospital (www. bartletthospital.org) in Juneau “provides quality health care and health promotion for the people of Juneau and communities of Northern Southeast Alaska.” This includes a 15,000-square-mile region in the northern part of Southeast Alaska in which approximately 55,000 people reside. Many in the service area

are communities inaccessible by road. Founded as St. Ann’s Hospital, the hospital opened in 1886 and was operated by the Sisters of St. Ann until the 1960s. In 1965, the City and Borough of Juneau assumed operation and a new facility, named for Alaska Senator Bob Bartlett, was built at the hospital’s present location. The 67-bed, self-supporting facility includes surgical services, diagnostic imaging, laboratory services, chemo/ infusion therapy services, physical/ occupational/speech therapy services, obstetrics, general medical/surgical services, mental health inpatient treatment, outpatient psychiatric services, chemical dependency residential and outpatient treatment, and sleep studies. Bartlett Regional Hospital has recently completed a $67 million new construction and renovation project of the hospital (150,000 square feet) over the course of seven years. Borough voters approved a temporary sales tax to help fund of this project. Bartlett is expanding its Digital Imaging this year, replacing a 16-slice CT scanner and adding a 128-slice model.

“By the end of this year, we will implement eICU technology in our Critical Care Unit providing direct patient monitoring and care through connection with Intensivists in Anchorage and around the country,” said Jim Strader, a hospital representative. “We finished the final stage of our Medical Surgical Unit adding increase bariatric capability.” The hospital plans to build a Child and Adolescent Mental Health facility in Juneau to provide 12 inpatient beds that could provide mental health evaluation with treatment and 10- to 14-day detoxification for chemically dependent youth. “We were recognized for the second year in a row by Mountain Pacific Quality for our overall commitment to quality and patient care,” Strader said. Bartlett hopes to meet the challenge of rising demand for local health care by “recruitment of highly-qualified nurses and other medical professionals, reimbursement, and transportation difficulties due to Juneau and Southeast Alaska’s geographic isolation,” Strader said. ❑

– where i belong –

PEOPLE FIRST › “I went to school at UAF and then spent the next ﬁve years working down south. It was a great job, but I knew I wanted to come back to Fairbanks because the nursing staff at FMH holds such high standards. Then I ﬁnally got the call from FMH — now I live in a place I love and work at a hospital that’s a vital part of this community.” Jolene / R.N., Pediatrics

community-owned fmhdc.com

www.akbizmag.com • Alaska Business Monthly • December 2011

RIPE

FOR

REDEVELOPMENT

BY GAIL WEST

Photos ©Ken Graham Photography.com

Redeveloping an Anchorage Community Mountain View business district forges a new future

The exterior of Mountain View Village Lofts redevelopment project.

ne of the oldest business and residential neighborhoods in Anchorage is sitting poised for a resurgence of its former glory. Mountain View has had its ups and downs over the years, probably reaching its nadir sometime in the last 10 years. Today, however, it boasts new homes, new businesses, a revitalized grocery store, a financial institution and a shopping community just waiting for the right opportunities to come its way. Founded in 1940 and assimilated by Anchorage in 1954, the neighborhood is one of the few gateways to both sides of Joint Base Elmendorf-Richardson. In its heyday – in the late ’40s and early ’50s – Mountain View was home to many military families and was the city’s first suburb with both residential and commercial business support. The Army Corps of Engineers laid out the streets on a well organized grid. Today, Mountain View still sits in a prime Anchorage location. On the northern edge of the city, it’s an easy stop for commuters to run errands and grab last-minute groceries on their way home to Eagle River or the Mat-Su Valley in the evenings. The ground

beneath the community’s buildings is some of the finest in the bowl. And, like the Phoenix, Mountain View is beginning to rise from the ashes of its near-demise.

BOOSTING NEW DEVELOPMENT Under the leadership of former Mayor Mark Begich, several entities focused their efforts on the community and began to destroy derelict structures, refresh tired streets and bring new businesses into the neighborhood. Mountain View Drive was rebuilt and its intersection with Bragaw Street was upgraded. Clark Middle School was replaced as a stateof-the-art educational facility, the community library reopened, a new Credit Union 1 building was erected on the former site of an old gas station and Glenn Square Mall lured national chain stores into the community. Cook Inlet Housing Authority began buying properties in Mountain View in 2002 and began razing blighted buildings – 128 by their count. In their places, CIHA has built 228 new homes and two mixed-use buildings and is seeking a business opportunity for the old Brewster’s building, which may be

demolished in favor a new building, and eight lots to the west of the building. “We’re talking to a number of interested businesses who would like to have a location on that corner,” said Carol Gore, president and CEO of CIHA. “It would require new development, and we want it to be a mixture of retail, office and housing space. Our goal is to act as developer to get the project going. “We’ve also just opened Mountain View Lofts with four retail spaces,” Gore added. “Three of those four are already leased. Island Stylin’, a sewing and alteration business, is moving in from downtown and a noodle factory – a new business for Anchorage – has leased two spaces. The owner of the noodle factory owns Hula Hands and a couple of other restaurants in Anchorage.” The final space is available, but may soon sport a second-hand clothing shop, featuring professional men’s and women’s clothes. Hickel Investment Co. recently upgraded the shopping center housing the Red Apple Market. GCI has plans to move into a retail space on Mountain View Drive and a new Subway is set to go in next to the existing McDonald’s. “That’s the busiest McDonald’s in Anchorage,” said Jewel Jones, executive director of the Anchorage Community Land Trust, also known as the ACLT. Jones added that Glenn Square is slated for a new restaurant. “Xalos Mexican Grill is a locally owned restaurant,” she said. “There’s one now in Fairbanks.” She also said she was talking with the Municipality about bringing some local government offices to the mall. “A dentist moved into the neighborhood in 2009 and he says he loves being here. He’s doing great and said the number of clients has exceeded his expectations,” she added.

NONPROFITS LEAD THE WAY The ACLT, created in 2003 to drive the revitalization of the Mountain View

www.akbizmag.com • Alaska Business Monthly • December 2011

neighborhood, began its work with the major acquisition of the old Sadler Warehouse building on Mountain View Drive. “We had some prospective tenants – Camp Fire, Foraker – and we used some rather innovative funding mechanisms,” Jones said. “It took a while to develop the building occupancy, but we have a positive cash flow today.” Other tenants in the building now include the State Council on the Arts, Alaska Works Partnership, State Programs for Infants and Children, ACLT offices, Cook Inlet Tribal Council and the Anchorage Museum at Rasmuson Center – both of which lease warehouse space. Jones also said the ACLT purchased the corner lot on Mountain View Drive and Bragaw Street where an old Unocal station had stood. Then, working with Chevron – purchaser of Unocal – remediated the property to bring in the new Credit Union 1 branch in 2010. ACLT purchased the John’s RV site, as well, and helped relocate tenants before tearing out the old cabins and motel office. “Now, it’s a large vacant property ready for development,” Jones said. After purchasing the Mobile Trailer Supply

land and buildings, which housed the only art gallery in Mountain View, ACLT recently sold that site to Special Olympics, which plans a statewide training facility and campus for competitors. “Our most recent acquisition,” Jones said, “was Alaska Super Pawn on Mountain View and Price. Now, we’re bringing it up to code so we can bring more private-sector investment into the community. We’ve already built out a workshop in the building and two of the most distinguished Alaska Native artists, Alvin Amason and Perry Eaton, will move into this space as well as work with us to attract additional artists. “Bringing businesses into Mountain View means they have to be convinced they’ll make money,” Jones added. “They’re not social enterprises.” To help convince those businesses, CIHA has recently commissioned a study of the neighborhood and preliminary results, as well as CIHA’s own figures, are favorable. ● Residents are making more money – the number of households earning more than $50,000 a year has nearly doubled since 1990.

● More than 50 percent of residents have lived in their homes for more than five years – a 30 percent increase from 2000. ● Real estate values have climbed 159 percent since 1998 – 83 percent more than in South Anchorage. ● Neighborhood occupancy today is at 94 percent; CIHA’s housing is 100 percent occupied. What businesses would Mountain View welcome? Both Gore and Jones, after working with the neighborhood residents and community council, can readily tick off a list. ✔ Pharmacy ✓ Attorney ✔ Insurance Agent ✓ Coffee Shop ✔ Child Care ✓ Book Store ✓ Hairdresser ✔ Barbershop ✓ Contract Post Office ✔ Medical Clinic ✓ Clothing Store ✔ More Restaurants “Not only would it mean shopping opportunities,” Gore said, “it also would mean job creation. Where else can you be five minutes from downtown, where 7,700 households could walk to your business every day, where cars from Eagle River and the bases drive down your street, where income levels are steady and growing?”

GREAT GROWTH Leslie Ellis, president and CEO of Credit Union 1, said she talks to businesses regularly about Mountain View. “I ask them if they’ve been there lately,” she said. “Have they looked at the demographics? One of the misconceptions is that people who live there don’t have money. We’ve exceeded our expectations since we opened and every time I’m there, I see people walking around with cell phones. We have a GCI pay box in our branch there, and I know people are making payments for cell phones and cable television. That helped convince GCI to move here. There’s a lot of activity here and Mountain View is open for business.” ❑

A loft area in a housing unit at Mountain View Village Lofts. www.akbizmag.com • Alaska Business Monthly • December 2011

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DEC

3-4 11-12

ALASKA THIS MONTH

BY NANCY POUNDS

The Oscar Anderson House, circa 1915, will be open Dec. 3-4 and Dec. 11-12 for its annual Swedish Christmas Tours.

Swedish Christmas Tours Revisit Bygone Era Oscar Anderson House hosts guided holiday event

ust over the hill from the frenetic pace and stimulating decorations of downtown Anchorage during the holidays awaits an oasis of simplicity. The Oscar Anderson House, circa 1915, will be open Dec. 3-4 and Dec. 11-12 for its annual Swedish Christmas Tours from noon to 4 p.m. The tours are a limited opening for the museum, which will close again until summer. The Oscar Anderson House, at 420 M Street, was one of the first privately built wood-frame homes completed

after the auctioning of Anchorage townsite lots in 1915. It is the city’s only house museum and is listed in the National Register of Historic Places. Swedish immigrant Anderson built the house in 1915 on a spot far from other development then under way. The Christmas tour is an opportunity to visit the museum at a different time of year, says Museum Manager Mary Flaherty. “Some days you go over the hill to the house, and it looks like a Machetanz painting,” she

www.akbizmag.com • Alaska Business Monthly • December 2011

said, describing the setting’s rich hues in deep winter. The seaside location is similar to Sweden, some museum visitors have told her. “Perhaps the vista (Oscar) saw looking out the window reminded him of home,” she said. Flaherty says the house is decorated very simply for Christmas. “We use a lot of straw decorations, which Swedish people today still use.” The Christmas tree has real, albeit unlit candles adorning it, and the front door features a wreath. Most of the decorations festoon the living room with a few others upstairs. Packages under the tree are wrapped in brown paper and twine, befitting the era. “It is a very warm and lovely time to visit,” Flaherty said. Preserved pieces at Oscar Anderson House recall the echoes of the active and vibrant family. The Christmas tour includes many elements of the regular tour, describing the adventures and daily life of the early Anchorage businessman and his wife and three children. Museum officials say they decorate the small home in the way the Anderson family probably did, honoring their Swedish heritage. Years ago Anderson’s daughter described to museum officials her family’s Christmas traditions. Christmas is a big deal in Sweden, and the celebration typically last about a month, beginning with St. Lucia Day Dec. 13. Flaherty recounted Anderson’s business background. He ran Ship Creek Meat Market, located at the present site of Stewart’s Photo, until the 1950s. Anderson also was one of the original owners of Jonesville mine, until the late 1940s. And in 1926, he helped start Anchorage Air

Transport, which included a later famous pilot, Russ Merrill. The Christmas tour originally was part of the early 1980s Hearthside Tours, progressive tours of several early Anchorage buildings including the Wendler Building, Flaherty said. These buildings were later purchased for commercial use, and the Anderson house Christmas tour has continued since the late 1980s. The tour can draw between 60 to 300 people throughout the four-day opening, and Flaherty says small groups fit best in the tiny cottage. Flaherty started volunteering at the museum in 1987. She says she feels privileged to work at there, although she is considering retiring at the museum’s 100-year anniversary, coming in 2015. “There’s a lot of interest to keep it,” she said. The museum was closed most of last summer due to city budget cuts, but when it reopened, and after some publicity, dozens of visitors arrived for tours, Flaherty said, adding how she dreams of local corporate sponsors supporting the often-struggling museum. “I think the Anderson House is one of the real pieces of history we still have,” she said. “I think it’s a symbol of early Anchorage and the pioneers who came here. They were willing to settle in the wilderness.” Even today, people moving to Anchorage liken it to going to a frontier and a new start, and the Oscar Anderson House museum is a glimpse of the life of “people who started it for all of us,” she said. The guided tour costs $5 for adults and $3 for children. ❑ For more information, call 274-2336.

ALL ! W NE COMING CO OMING O MIN NG IN JANUARY 2012 We’re changing Alaska This Month! Find new entertainment, dining and travel information, along with our calendar of events every month. ENTERTAINMENT • DINING • TRAVEL • CALENDAR www.akbizmag.com • Alaska Business Monthly • December 2011

H R M AT T E R S

BY DR. LYNNE CURRY

Truth or Consequences, Alaska

hen you terminated Carl, he threatened to sue you. To avoid trouble, you gave him a month of severance pay and provided him a bland yet positive letter of reference. Will your reference letter backfire on you when the next employer that hires Carl finds out he interviews better than he works? When Katherine quit, you felt glad to be rid of such a toxic employee. Then you receive a call from a prospective employer you know well. You wouldn’t wish Katherine on your worst enemy. Should you tell the truth?

TRUTH CARRIES LITTLE RISK As a supervisor, what risks do you take when you provide negative information on former employees? Do you incur a risk when you write letters of reference – even positive ones? According to the American Business Law Association study on defamation suits and plaintiff’s awards, managers fearing defamation suits when giving bad references risk little. Few defamation cases make it to trial and the former employee plaintiffs lose 75 percent of these cases. Further, Alaska Statute 965.160 provides good faith protection to employers who give factual, though negative references. Disgruntled former employees have to prove “clear and convincing evidence” of negligence or bad faith on the part of their former employers to win defamation suits.

LIES ARE LITIGABLE In contrast, employers provide falsely positive references or fail to give prospective employers negative information about former problem employees take on potential liability for problems their honest disclosure could have prevented. As an example, a Florida judge

ruled Allstate Corp. could be sued for punitive damages for concealing a former employee’s potential violence. Allstate management fired an employee for bringing a gun to work yet wrote a recommendation letter stating the employee was let go as part of a corporate restructuring. Fireman’s Fund Insurance Co. relied on Allstate’s recommendation and hired the former Allstate employee who then shot five coworkers in the Fireman’s Fund cafeteria. In another landmark case, a school vice principal received praise and positive letters of recommendation from three former school districts, despite being involved in sexual misconduct with students at all three districts and being forced to resign from two. After he molested a 13-year-old girl at a fourth school, she sued all four districts. California’s Supreme Court ultimately ruled that employers have a duty to disclose negative information if the problems could expose future individuals to physical harm.

REFERENCE GUIDELINES What guidelines should you follow when asked for reference information on a former employee? If you receive a phone call asking for a reference, find out exactly whom you’re speaking to. When answering questions, be brief and stick to the truth. If you’re describing a former problem employee, avoid any temptation to exaggerate or vent. If you’re tempted give a falsely positive reference, remember what you say can come back to haunt you. If you discharged a former employee for a serious offense, either run the situation by your attorney or ask the prospective employer to fax you a waiver, signed by your former employee, limiting your liability for any information you give.

Honesty best policy for references

Dr. Lynne Curry

About the Author Local management/employee trainer and consultant and the author of Managing Equally and Legally, Won By One and Solutions, Dr. Lynne Curry regularly provides managerial, leadership and board training seminars as well as public seminars. Curry’s company, The Growth Company Inc., offers a free monthly “breaking news” HR/management newsletter and two seminars (70 minutes and three hours) monthly. For more information on The Growth Company Inc.’s training and HR On-call services to companies needing help with recruiting, teambuilding, strategic planning, management or employee training, mediation or HR trouble-shooting, please visit ❑ www.thegrowthcompany.com.

www.akbizmag.com • Alaska Business Monthly • December 2011

PHILANTHROPY IN ALASKA SPECIAL SECTION

Philanthropy in Alaska Businesses giving back to the community BY TRACY BARBOUR

ith more than 73,500 licensed businesses, Alaska has a considerable base of philanthropic resources to support its communities. These corporate citizens provide substantial financial donations for nonprofit organizations that include religious, artistic, cultural, social and recreational groups. Many Alaska businesses also donate time and other resources, which are equally as valuable to the community. Their generosity not only provides vital support for Alaska’s 6,000 or so registered nonprofits, but also fosters good will that strengthens the state as a whole. This article presents only a minuscule sampling of how various businesses are giving back throughout Alaska.

The YMCA’s “Toss Your Boss” fundraiser which involved rappelling off the J.L. Tower appealed to two sides of Nerland Agency: the desire to give back – and the quest to be brave. “Brave:works is the Agency’s mantra – a way to uniquely engage Alaskans and others in the advertising they create. And being involved in the community is mentored at Nerland. President Karen King is involved directly with at least seven nonprofit organizations in Alaska, on boards or other committees, and other staff at Nerland are equally active. www.akbizmag.com • Alaska Business Monthly • December 2011

Azimuth Adventure Photography/www.azimuthadventure.com

GIVING BACK FINANCIALLY One of the most common ways Alaska businesses give back to the community is by donating funds to diverse charities and worthy causes. For example, First National Bank Alaska supports a variety of Alaska-based nonprofit organizations and charitable causes in four main areas: community or public service; health and education; arts and humanities; and youth and senior citizens, according to Senior Vice President Branch Lending and Administration Division Doug Longacre. First National donates funds, as well as volunteer hours and expertise, to many nonprofit organizations in the communities where it operates. “Our employees live in these communities,” Longacre said. “They own homes, raise their families and pursue their dreams of success in Alaska communities. They are eager to help make those communities safe, healthy and friendly places to raise their families and pursue their banking careers.”

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Wolk & Associates Â&#x17D;Â&#x192;Â&#x2022;Â?Â&#x192; Â&#x2021;Â&#x192; Â&#x2039;Â&#x2C6;Â&#x2021; Â&#x2021;Â?Â&#x2013;Â&#x2021;Â&#x201D;

Â&#x2021;Â&#x2013; Â&#x2039;Â?Â&#x2DC;Â&#x2018;Â&#x17D;Â&#x2DC;Â&#x2021;Â&#x2020;Ç¤ Â&#x2021;Â&#x192;Â&#x201D;Â? Â?Â&#x2018;Â&#x201D;Â&#x2021;ÇĄ Â&#x2DC;Â&#x2018;Â&#x17D;Â&#x2014;Â?Â&#x2013;Â&#x2021;Â&#x2021;Â&#x201D; Â&#x2018;Â&#x201D; Â&#x2020;Â&#x2018;Â?Â&#x192;Â&#x2013;Â&#x2021; Â&#x2013;Â&#x2018;Â&#x2020;Â&#x192;Â&#x203A;Ç¨ The 2012 Gala will be February 18th and will feature guest speaker Jeff Corwin of television channel Animal Planet. Reservations and sponsorship information can be found at www.alaskasealife.org/ alaskamarinegala.

Why Donate to the Alaska SeaLife Center?

The Alaska SeaLife Center is located on the shore of Resurrection Bay in Seward, Alaska.

ince 1998, over 2 million people have been to the Alaska SeaLife Center in Seward. Located on the shore of Resurrection Bay, the Center is the largest private employer in Seward and a partner with industry, community, and governmental agencies in marine research and education. The Center recently received full accreditation by the Association of Zoos and Aquariums. This accreditation is awarded to less than 5% of all U.S. zoos and aquariums.

The nonprofit Center relies on the generous support of people like you. By supporting the Alaska SeaLife Center you are demonstrating a dedication to:

Science Education â&#x20AC;&#x201C; The Center introduces the Alaska marine ecosystem and all its wonderful inhabitants to visitors, interns, students on field trips and nocturne programs, and distance learning program students in Alaska and around the world.

Activities authorized under a Stranding Agreement with NOAA/NMFS.

Community â&#x20AC;&#x201C; The Alaska SeaLife Center is a 100% Alaskan nonprofit that does our business here, serves as a visitor destination and employs over 90 year-round Alaska residents in addition to some 25 student interns each year.

Supporting the Alaska SeaLife Center There are many ways to get involved. Families can become members, adopt an animal, or even volunteer together at the Center. Individuals can donate through the Pick.Click. Give. program or through legacy gifts. Businesses can support the Center through the State of Alaska Education Tax Credit program, through direct donations, matching gifts, employee-giving campaigns, RoundUp 4 Wildlife Rescue point-of-sale campaigns, or event sponsorship. Individuals and businesses alike can rent the unique facility for weddings, corporate meetings, or team-building activities.

Alaska Marine Gala Each year hundreds of Center supporters gather at the Denaâ&#x20AC;&#x2122;ina Center in Anchorage to celebrate Alaskaâ&#x20AC;&#x2122;s oceans. A â&#x20AC;&#x153;blue-tieâ&#x20AC;? affair, the Alaska Marine Gala highlights not only the Centerâ&#x20AC;&#x2122;s work, but also recognizes others who are benefiting marine science.

Wildlife Rescue â&#x20AC;&#x201C; The Alaska SeaLife Center is the only permanent marine wildlife rehabilitation center in Alaska. Stranding program staff members respond to calls to assist stranded marine mammals and seabirds across the state. Rehabilitated animals are then released into the wild or transferred to zoos and aquariums.

Research conducted under NMFS permit #14324.

Marine Research â&#x20AC;&#x201C; Our scientists conduct innovative coldwater marine science that has global impacts. Our work directly informs marine educators, resource managers, communities, industry and other stakeholders in the Alaska and around the North Pacific ecosystem. The scientists at the Center study the marine ecosystems of Alaska and the species who call it home, some of which are listed as threatened or endangered. Center scientists have pioneered research on Steller sea lions, eiders, harbor seals, sea otters and fur seals. Scientists have developed cutting-edge tracking technology, and minimized research impacts on the animals and environment.

Stewardship of Marine Resources â&#x20AC;&#x201C; The Alaska SeaLife Center promotes the use of sustainable practices that can have positive impacts on marine resources. Its vision is that future generations continue to enjoy the bounty of Alaskaâ&#x20AC;&#x2122;s oceans.

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Over the past five years, the bank has given more than $5 million in cash to Alaska nonprofit organizations, with countless number of employee volunteer hours donated to civic, school and charitable causes. “First National Bank employees step up to donate their expertise as bankers, home loan professionals and fundraisers, rolling up their sleeves to work shoulder-to-shoulder with their neighbors to get the job done,” Longacre said. In particular, the bank has played a long-time leadership role in the United Way in Alaska. “We encourage our employees to donate to the United Way in their community, Longacre said. “We assign employees to help with the United Way campaign at our bank, and the bank matches employee donations made to the United Way.” Wells Fargo Bank is also an avid contributor to United Way and other nonprofits in Alaska. Recently, its team members donated a record $373,000 to nonprofit organizations and schools in Alaska as part of the company’s month-long Community Support and United Way Campaign in September, according to an Oct. 27 news release. This is the highest total ever and a 30 percent increase over 2010. Wells Fargo will invest an additional $150,000 in matching funds for a total investment of $523,000 in nonprofit organizations throughout the state. “Year after year, our Alaska team members respond with empathy and leadership by donating their time and money to make a difference in the lives of Alaskans,” said Richard Strutz, Wells Fargo Alaska regional president. “I’m very proud of our team for rising to the challenge – exceeding our fundraising goal by $60,000 and contributing $90,000 more than last year. These amazing results demonstrate our enduring commitment to help Alaskans in need.” In addition to donating personal funds, San Francisco-based Wells Fargo team members raised money for local United Way agencies and other charities through silent auctions, casual days, luncheons and other activities. Each year, Wells Fargo invests $1.5 million in more than 280 nonprofits and schools in Alaska.

Photo courtesy of Neeser Construction Inc.

Jerry Neeser, chief executive officer of Neeser Construction Inc.

OTHER EXAMPLES OF FINANCIAL GIVING The list of financial contributors to Alaska communities also includes Neeser Construction, Hecla Greens Creek Mining Co., ConocoPhillips Alaska and Teck. Neeser Construction is a strong supporter of the Healthy Alaska Natives Foundation, the Wounded Warrior Foundation and the American Cancer Society. It also gives money to The Salvation Army, Camp Fire USA, the Alaska Native Heritage Center, the American Red Cross, Special Olympics and Alyeska Ski Club. Neeser Construction receives dozens of requests for contributions each month, but carefully considers where its donation dollars will go. “I like to know that a lot of the dollars that are given are going directly to the people,” CEO Jerry Neeser said. Hecla Greens Creek Mining Co., Juneau’s largest private-sector employer, donated $300,000 in May to help the University of Alaska Southeast Center for Mine Training develop a unique approach to engage local high school students and to prepare them for future employment in the mining industry. The program, called the Hecla Greens Creek Pathway to Mining Careers, introduces high school juniors and seniors to mining and mining careers. Pathway to Mining Careers also establishes a two-week Mine Academy where students can receive the

federally required safety training to work in a mine, provides opportunities for students to participate in job shadowing at an actual mine site, and enters students in a university program to obtain a one-year Mine Mechanic Occupation Endorsement or a twoyear Mine Mechanic AAS degree. In many cases, participating students can receive scholarship funding provided by Hecla. “The ultimate goal is to build and sustain a local work force that is able to fulfill the critical need for qualified mechanics,” said Human Resource and Community Relations Manager Ron Plantz. Earlier this year, Teck donated $1.25 million to the Northwest Arctic Borough School District’s Youth Leaders Program. The five-year endowment ensures the sustainability of a suicide and youth leadership program recognized as one of the most effective youth programs in the state. Teck operates Red Dog Mine near Kotzebue. ConocoPhillips has also donated funds to the Northwest Arctic Borough School District. The company recently made a $25,000 award to support the Star of the Northwest magnet school being built in Kotzebue. The funds will be applied to the school’s Process Technology curriculum and will open opportunities for young adults in the region to enter industry careers in mining and oil and gas.

DONATING TIME AND OTHER RESOURCES Many companies often lend time and materials to benefit Alaska nonprofit entities. Wells Fargo team members, for instance, volunteer a considerable number of hours to some of their favorite charities and causes. During the United Way’s Day of Caring, they volunteered at organizations such as YWCA of Anchorage and the AWARE women’s shelter in Juneau. In 2010, Wells Fargo Alaska team members invested 10,100 volunteer hours in their communities, representing a dollar value of $215,000. They served as mentors, board members, project heads, fundraisers, educators and in many other capacities. Wells Fargo maintains a Volunteer Service Award program to reward its team members for their efforts by making contributions to the nonprofit or

www.akbizmag.com • Alaska Business Monthly • December 2011

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%H Inspired. Even though Alaska’s communities are separated by hundreds of miles, when it comes to health, we’re all connected. The Healthy Alaska Natives Foundation raises awareness and resources for health care improvements, wellness and prevention and healthy village environments — bringing essential services to individuals and communities in need. Learn about the Healthy Alaska Natives Foundation initiatives at InspiringGoodHealth.org, and you too will be inspired to give.

Inspired

www.InspiringGoodHealth.org facebook.com/HealthyAKNatives

Photo courtesy of Wells Fargo Bank, N.A.

K-12 school where they volunteer. For example, Wells Fargo recently contributed $1,000 to The Children’s Place in honor of Mat-Su Valley District Manager Aryne Randall. The award and donation recognized Randall’s contributions as a three-year board member to The Children’s Place, which provides the area’s child abuse victims and their families with counseling, support services and on-site evaluation, investigation and treatment. “Aryne has shown incredible commitment to The Children’s Place by giving her time, talent and expertise to help the Mat-Su community care for its children,” Strutz said in an August 19 news release. “Wells Fargo is proud to recognize Aryne with a Volunteer Service Award for generously investing in The Children’s Place.” Wells Fargo also contributed $2,000 to the Pancreatic Cancer Action Network in honor of Commercial Banking Business Associates Kim McFaddenDowling and Madeline Jones as part of its Volunteer Service Award and “$500 for 50 hours” programs. The $1,000 Volunteer Service Award recognized Dowling’s valuable contributions as Alaska’s first Pancreatic Cancer Action Network community representative. Dowling and coworker Madeline Jones earned an additional $500 each for the organization by volunteering 50 hours of community service in 2011. This year, 241 team members were awarded a total of $400,000 to their organizations though Wells Fargo’s Volunteer Service Award program. Volunteering is also important at First National Bank. The bank’s employees donate their time year-round to help make their communities better places to live. For instance, seven employees recently painted an Anchorage neighborhood home as part of NeighborWorks Anchorage Paint the Town Program. They worked all day to spruce up the home, marking the fifth consecutive year First National volunteers have painted a house. “You really do see the difference a little bit of elbow grease and a fresh coat of colorful paint can do to brighten everyone’s spirits,” said Community Relations Manager Natasha Pope. Credit Union 1 made a big push to collect 2,084.4 lbs of food for

Wells Fargo team members Charlene Callahan, Darren Franz, Jennifer Imus and Vicki Kennebec raised $510 for United Way of Tanana Valley during a September 29 pasta feed at its downtown Fairbanks store on Cushman Street.

Fellowship in Serving Humanity, a volunteer group of Anchorage residents who provide food to people in need. The food drive was part of Credit Union 1’s 2011 Community Service focus of fighting hunger. This year, Credit Union 1 employees have volunteered more 2,000 hours and raised and donated more than $68,000.

CREATIVE WAYS OF CONTRIBUTING Alaska businesses are also engaging in innovative methods to contribute cash, time and other resources to communities around the state. The First National branch in Haines, for example, had to get creative to pull off a pizza party with an American Bankers Association’s Teach Children to Save lesson at a Haines elementary school. The students had won the lesson and pizza party as a prize for entering the bank’s “What are you Saving for” drawing contest. But the community of Haines didn’t have a pizzeria, so the bank faced the challenge of having to airlift the special treat from Anchorage. Then The Salvation Army made an unusual proposition by offering to use its own kitchen to make the pizzas locally. So the Haines branch was able to purchase hot pizzas from the nonprofit and serve them to the classroom. It was a win-win-win situation – particularly for The Salvation Army, which had been contemplating

the idea of baking pizzas to raise funds. “So now, thanks in part to an ABAsponsored program that shows children the importance of saving, every Friday the citizens of Haines can enjoy their pizza fresh from the oven,” Longacre said. “And one of Alaska’s oldest charities has a new source of revenue.” For Neeser Construction, the creative challenge was bigger than a pizza. It was a whale. Once, while working at a remote site, employees of the company used their equipment to extract a whale from the Bering Sea for the Native community. It was a spontaneous reaction that naturally fit the company’s culture of benevolence. “The employees didn’t need to check with me; they knew that there was a need, and they responded,” Neeser said. “I think it shows the depth of giving for our company.” Neeser said he feels philanthropy is an intrinsic part of doing business. Moreover, he says, it’s an obligation. “Our resources come from the community,” Neeser said. “It’s our way of giving back to a community that blesses us.” Longacre expressed similar sentiments. “First National is an Alaska bank, employing about 700 Alaskans in communities throughout the state,” he said. “We do business in Alaska. Our profits stay in Alaska. It’s only right that our corporate donations stay in ❑ the state.”

www.akbizmag.com • Alaska Business Monthly • December 2011

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PHILANTHROPY IN ALASKA SPECIAL SECTION

The Invisible Nonprofit Sector Employs many, spends money in communities they serve BY TRACY BARBOUR

Photo courtesy of Akeela Inc.

osalie Nadeau has been serving the needs of the public through Akeela Inc. for more than 20 years. When she first joined the nonprofit organization, it had an $800,000 budget and 11 employees. Now it operates with a budget of $11 million and 140 employees. “Akeela is not a tiny program anymore,” says Nadeau, executive director. Akeela offers a variety of services for the prevention and treatment of substance and alcohol abuse in Anchorage and other Alaska communities. Founded in 1974, Akeela serves the community by striving to “enhance the ability of citizens and their families to succeed in life.” It offers outpatient and residential treatment, transitional housing, tobacco prevention and education, and an Alcohol and Drug Information School. “We deal with the segment of society that most people would like to pretend is not there,” Nadeau says. “But if we don’t deal with them, they could be creating mayhem on the streets, breaking into homes and costing (the state) huge amounts of money.”

Rosalie Nadeau, executive director of Akeela Inc. www.akbizmag.com • Alaska Business Monthly • December 2011

Akeela Inc. is among the large assortment of nonprofits that form an “invisible” sector of Alaska’s economy. As of Sept. 26, there were 5,976 nonprofit corporations registered and in good standing in Alaska, according to the Alaska Department of Commerce, Community and Economic Development Division of Corporations, Business and Professional Licensing. Almost 25 percent of the State’s registered nonprofits are religious organizations. However, Alaska nonprofits run the gamut, from charitable organizations to civic leagues and private foundations. “Alaska nonprofits serve a wide range of beneficiaries, both on a membership level and public level,” says Don Habeger, director of the Division of Corporations, Business and Professional Licensing. “The scope of who or what a nonprofit may serve is large, especially in such a demographically diverse state as Alaska.” Alaska has numerous active nonprofits that are unregistered or unincorporated. But to officially be recognized as a nonprofit in the state, organizations must complete the formal process for incorporation. In addition, some nonprofits are required to register with the IRS to obtain tax-exempt status, such as 501(c)(3) corporations, like Akeela. These nonprofits make up the bulk of organizations in the nonprofit sector. They’re exempt from the federal corporate income tax and represent a large and diverse group that includes two dozen tax codes. For instance, the 501(c)(3) code includes rules and regulations for religious, charitable and educational organizations. The code for social welfare organizations, another significant type of tax-exempt organization, is 501(c)(4).

CHARACTERISTICS OF ALASKA NONPROFITS Regardless of their tax-exempt status and activities, the entities that constitute Alaska’s nonprofit sector share six common characteristics, according to The Foraker Group Report on the Alaska Nonprofit Economy: Update 2010. The report, prepared by University of Alaska’s Institute of Social and Economic Research, indicates nonprofits:

● Serve some public purpose and contribute to the public good ● Involve some voluntary participation, typically in the form of a board of directors but often involving voluntary labor as well ● Are self-governing – meaning they have internal controls that are not governed by outsiders ● Are not dedicated to generating profits for their owners through their activities, except that excess revenues may be reinvested in the mission of the organization ● Are institutionally separate from the government ● Are organizations which typically secure legal standing as corporations chartered under State laws. This allows them to enter into contracts and carry on other functions. However, it is not necessary for a nonprofit to be chartered in this way There’s no comprehensive database that tracks all nonprofits because smaller organizations don’t have registration or reporting requirements. But there were an estimated 7,000 total nonprofit organizations operating in Alaska in 2010, according to The Foraker Group Report, which is a partial update of the more comprehensive Report on the Alaska Nonprofit Economy prepared in 2006. The number of reporting nonprofits – including those eligible to accept taxdeductible contributions – increased by 1,000 or 13 percent between 2004 and 2010. It’s difficult to determine why the number increased, says Scott Goldsmith, the report’s co-author. He adds: “One of the reasons in the growth for the number of registered nonprofits is we’re just being more careful in identifying who the nonprofits are.” Alaska’s reporting nonprofits accounted for most of the paid employment, revenues, expenditures and assets of the nonprofit sector. In 2010, gross receipts were $4.1 billion, and combined assets were $7.6 billion. Between 2004 and 2010, gross receipts increased by $750 million – 22 percent – and assets by $2 billion. Tax-exempt nonprofits in Alaska fall into two basic categories: publicserving and member-serving. Publicserving nonprofits make up 70 percent

of all nonprofit organizations in the state, and include religious congregations, funding intermediaries (including foundations) and service providers catering to the public at large. Public-serving nonprofits – often referred to as “charitable” organizations – are comprised of civic league and social welfare organizations engaged in shaping public policy through active advocacy. Most of these are Lions Clubs, Rotary Clubs and Veterans of Foreign Wars. Alaska has a variety of memberserving nonprofits. Electric and telephone utility cooperatives are the largest type in terms of expenditures. Other memberserving nonprofits serve employee, business, professional or social groups. According to Goldsmith, Alaska’s nonprofit sector is unique because it has huge Alaska Native health and social service nonprofits. Prime examples are Alaska Native Tribal Health Consortium and Yukon-Kuskokwim Health Corp., each with annual expenditures exceeding $100 million. As another area of distinction, Goldsmith says, Alaska has a scatted population, which accounts for why it has so many nonprofits.

FUNDING SOURCES Member-serving nonprofits receive most of their proceeds from program service revenues and membership dues. Government funding fuels the financial engine of many public-serving nonprofits. In Alaska, 43 percent of the revenues of public charities originate from the government, compared to 29 percent for the nation as a whole. Anchorage Community Mental Health Services (ACMHS), for instance, provides services to individuals and families on an ability-to-pay basis. One of the largest public charities in Alaska, it receives less than 1 percent of its funds through donations, according to Executive Director Jerry Jenkins, M.Ed., MAC. Instead, ACMHS is financed through a combination of public and private grants, along with revenues generated from fees for services. “The federal funding is contingent upon grants,” Jenkins says. “Grants depend on creativity, meeting needs and collaboration. We’ve done very well in that area.”

www.akbizmag.com • Alaska Business Monthly • December 2011

So has Akeela, which receives considerable funding from the State. However, matching funds are typically required. “If I get a State grant, I am obligated to come up with a 33 percent match,” Nadeau says. Food Bank of Alaska, which secures donated food for nonprofit agencies to distribute to hungry Alaskans, relies on a diversified source of funds. About 40 percent of its funds are from individual donors, with 35 percent coming from federal programs and the rest from foundation and corporate money, according to Executive Director Susannah Morgan. Alaska nonprofits employ a diversity of promotional efforts to drum up funds, including phone solicitation, direct mail, email, social media, planned giving programs and partnering with businesses in cause-related marketing. ACMHS, for instance, generates contributions through an annual art auction, capital campaigns and the 7,000 subscribers on its journal mailing list. Food Bank of Alaska relies on direct mail, Facebook and grant writing to promote its worthy cause. It also uses

akbizmag.com or just scan our QR code at top to your smart phone!

a great deal of one-on-one contacts and personal referrals. “We believe we build the best relationship with folks by actually meeting them,” Morgan says.

IMPACT OF NONPROFITS Alaska’s nonprofits have a tremendous financial and social impact on the community. For instance, Food Bank of Alaska collects and distributes millions of pounds of food to agencies that serve individuals. With 25 employees, it distributed 6.7 pounds of food throughout Alaska in 2010. “We are the beating heart of the anti-hunger community,” Morgan says. “We make sure people don’t fall off and become invisible and overlooked.” Food Bank of Alaska has been collecting and distributing food since 1979. About half of its food comes from stores, farmers and fishermen. One-third is provided by the U.S. Department of Agriculture, and the remainder comes from what the nonprofit purchases and collects from the food drives. The organizations goal, in essence, is to ensure people’s basic need for food is met – so they can work, learn and function

“If we can catch the child early, we can save the State about $1 million (by avoiding 10 years of residential treatment at $200 a day).” – Jerry Jenkins, Executive Director M.Ed., MAC as active members of society. Without Food Bank of Alaska, there would be a lot more misery, Morgan says. “It’s about making sure everyone has an opportunity to become a happy and healthy adult.” ACMHS, in contrast, focuses on fostering healthy minds. It provides specialized mental health services for children who are severely, emotionally disturbed; adults who are seriously mentally ill, and individuals with Alzheimer’s or related dementia. With 180 employees, ACMHS has been serving the public since 1974. “If Anchorage Community Mental Health were not available,” Juenkins says, “the State of Alaska would be mandated to provide institutionalbased care, which is normally three to five times more expensive than noninstitutional care. We also have a trickle-down effect. We’re involved with helping more than 250 people be housed in Anchorage.” As a unique specialty, ACMHS operates a trauma center for children affected by abuse and other disturbing situations. Some children are five years old or even younger. “What we’re attempting to do is to engage those children as early and often as possible, so they don’t need the services down the road, Jenkins says. “If we can catch the child early, we can save the State about $1 million (by avoiding 10 years of residential treatment at $200 a day).” Engaging children with extreme behaviors earlier also improves the agency’s chance for success. Each year, ACMHS helps about 500 kids at the trauma center improve their lives and future. “The kids that are helped don’t

www.akbizmag.com • Alaska Business Monthly • December 2011

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Nonprofit at Work A nonprofit organization, ANHC offers a variety of educational and cultural awareness programs on site, as well as in local businesses and schools. One of its key objectives is to pass on the wisdom and principles of Alaska’s elders to the younger generation. “The center seeks to develop cultural pride, knowledge and values in Alaska Native youth to provide a foundation for their lifelong success,” said ANHC President and CEO Annette Evans Smith. “By impacting the cultural identity and self-esteem of our youth, the cultural wealth of Alaska Native people will continue for future generations.” ANHC hosts interactive programs to teach visiting students of all ages about Alaska’s indigenous cultures. It also presents a free cultural outreach program, called Shavila, inside schools for students in grades kindergarten through six. The 45-minute program uses storytelling, Native dances and other demonstrations to communicate the diversity of Alaska Native cultures. Recently, ANHC launched the Walking in Two Worlds program to help atrisk Alaska Native/American Indian students with high absenteeism, behavior problems, poor adjustment, or facing

Photo by Matt Hage

he Alaska Native Heritage Center (ANHC) operates under the distinct mission of sharing, perpetuating and preserving the unique Alaska Native cultures, languages, traditions and values through celebration and education. An award-winning cultural center, it provides visitors a unique opportunity to experience the diversity of 11 Alaska Native cultures in one location. ANHC conveys the rich heritage of Alaska’s different cultural groups through engaging workshops, demonstrations, and guided tours of indoor exhibits and outdoor village sites. It was established in 1999, and has received more than a million visitors from all around the world. A dance lesson taught by Marcella McIntyre, Education Specialist.

disciplinary action such as in- or out-ofschool suspension or expulsion. It combines intervention from school staff and parents with counseling, tutoring, mental health and/or social services to put students back “on-track” to graduate. Soon, the program will offer an afterschool component to provide homework time, cultural activities, group discussions and socialization at the center.

Vision is Essential In the future, ANHC plans to create language immersion summer camps for Alaska Native youth to learn their languages along with art, dance and other cultural information. The camps are vital because many of the Alaska Native languages or dialects are at risk and have very few speakers remaining, according to Evans Smith. She said: “The Alaska Native languages are part of preserving the cultures, and the center has worked on this for many years and with different projects. This new project represents a different approach, and we are very excited about it.” ANHC also conducts a Cultural Awareness Workshop and Cultural Understanding Experience training for businesses, organizations, agencies and other groups.

The fee-based workshops engage participants in active learning through games, interviews, role play, personal reflection, video presentations, dramatic performances, tours and lectures. Training sessions, which can be scheduled for as little as two hours or up to two days, are held at the center or client’s location. Whether it’s enlightening adults or youth, ANHC is making a difference by improving the world’s understanding and appreciation of Alaska Native people.

A L A SKA NAT I V E H E R I TAG E CENTER A non-profit organization

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become drug addicts; they donâ&#x20AC;&#x2122;t become criminals; they finish school,â&#x20AC;? Jenkins says. Alaska is leading the nation in negative indicators, such as child abuse, sexual assault, alcoholism and suicide, Jenkins points out. Organizations like ACMHS â&#x20AC;&#x201C; which serves about 2,000 members of the public â&#x20AC;&#x201C; are the ones that respond to those situations. â&#x20AC;&#x153;The scale of the problem would be substantially greater if nonprofits were not here,â&#x20AC;? Jenkins says. Akeela is also impacting the community in a very positive and substantial way. It serves about 500 people through its residential and outpatient programs in Anchorage and Ketchikan, offering programs for individuals and families. â&#x20AC;&#x153;The reality is we save people money,â&#x20AC;? Nadeau says. â&#x20AC;&#x153;We spend money, but the expense of the police and courts dealing with people who are out of control out on the streets is much greater than dealing with people with substance abuse.â&#x20AC;? In addition, Akeela operates

programs in 10 penal institutions in the state. About 95 percent of its clients have a prison record or are serving their last year of prison in treatment. Nadeau says: â&#x20AC;&#x153;If I donâ&#x20AC;&#x2122;t get them clean, I still save the community money. But in 20 years of doing this, I have never had a client commit a crime while in treatment.â&#x20AC;? Akeelaâ&#x20AC;&#x2122;s substance abuse treatment costs far less than prison, Nadeau says. The nonprofitâ&#x20AC;&#x2122;s most expensive treatment â&#x20AC;&#x201C; the residential program through Akeela House â&#x20AC;&#x201C; costs about $18,000 per person annually. The economic benefit of Akeela also relates to its staff of 140 employees, many of whom have advanced degrees. About 85 percent of Akeelaâ&#x20AC;&#x2122;s budget is for personnel costs. â&#x20AC;&#x153;Every two weeks, we transmit about $155,000 for payroll,â&#x20AC;? Nadeau says. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s net payroll. That money gets spent in the communities.â&#x20AC;? Plus, Akeela maintains contracts with copiers, office supply stores and physicians that provide telemedicine

â&#x20AC;&#x201C; all of which sends dollars to the local economy.

VALID BUSINESSES Despite their significant benefits, nonprofit organizations represent a hidden business sector that people often undervalue. However, Nadeau maintains that nonprofits are like other businesses: â&#x20AC;&#x153;We employ people. We spend money in the community. We grow things.â&#x20AC;? She adds that every good nonprofit is a well-run business. â&#x20AC;&#x153;I think one of the things the general public doesnâ&#x20AC;&#x2122;t understand is that good nonprofits are really well-managed or they wouldnâ&#x20AC;&#x2122;t exist,â&#x20AC;? she says. Jenkins agrees. Alaska nonprofits are valid businesses that help drive economy. They donâ&#x20AC;&#x2122;t have shareholders, but they do have stakeholders counting on them to earn money for their survival. Budgeting, according to Jenkins, drives everything. â&#x20AC;&#x153;We canâ&#x20AC;&#x2122;t do our social mission if we donâ&#x20AC;&#x2122;t do our business mission,â&#x20AC;? he says. â&#x20AC;&#x153;We have to be bottom-line focused.â&#x20AC;? â?&#x2018;

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www.akbizmag.com â&#x20AC;¢ Alaska Business Monthly â&#x20AC;¢ December 2011

PHILANTHROPY OP-ED SPECIAL SECTION

Mobile Donations Come to Alaska Text and give BY KEN MILLER

Photo courtesy of Bean’s Cafe

obile donating, giving money to a nonprofit via text message, is incredibly quick and easy – but for many years it was unavailable in Alaska. Today you can simply text a keyword such as “BEANS” to a short code number like “50555” to donate, for example to Bean’s Café, an Anchorage nonprofit that feeds the needy. When you text to “BEANS,” a set amount of $10 is charged to your phone bill. Your carrier, such as AT&T Alaska, GCI or Alaska Communications then delivers the funds to a company, which then forwards the donation to the charity. The mobile donation approach has been around for a few years, but really did not catch on until the earthquake in Haiti. The American Red Cross Haiti Relief and Development Fund raised more than $32 million within a month after the disaster. With successes such as Haiti and other disasters that raised millions for large national nonprofits, many Alaska nonprofits began looking at text donating as a method to increase revenue and especially reach the younger demographic that is so comfortable with texting and smartphones. In the summer of 2010 – Bean’s Café and The Children’s Lunchbox – two Anchorage-based nonprofits, began looking at mobile giving and within three months had text donating with AT&T Alaska, Sprint, Verizon and T-Mobile – national carriers with the technical infrastructure to implement, capture and forward the donations. By early 2011, Alaska’s two largest local carriers, GCI and Alaska Communications, began projects to incorporate text donations within their platforms.

Ken Miller

GCI and Alaska Communications are great supporters of philanthropy and nonprofits throughout the state and therefore began the long and sometimes difficult process of implementing the technical procedures so any individual on their respective carrier would have a way to donate to a nonprofit that is signed up to do text donating. GCI and Alaska Communications provide this service throughout the state at no cost to their customers. At this time anyone in the state of Alaska whether in Barrow or downtown Anchorage can donate to Bean’s Café, The Children’s Lunchbox and

Catholic Social Services – and soon many more nonprofits – because of the time and dedication of local carriers such as GCI, Alaska Communications and AT&T Alaska. Alaska is truly on the cutting-edge of new technology that will benefit all of the people and causes those nonprofits in Alaska support. ❑ About the Author Ken Miller is the director of development at Bean’s Café and is a board member of the Association of Fund Raising Professionals. He originally moved to Alaska in 1975 and is a graduate of Dartmouth College.

www.akbizmag.com • Alaska Business Monthly • December 2011

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ou may be one of the many people who have driven by our Anchorage offices and seen our big green sign at the corner of Northern Lights Boulevard and Denali Street. Did you think we were a soup kitchen? Did you know we are Alaska’s special needs nonprofit and have been supporting families for the last 20 years?

Our guess is probably, but not really! Stone Soup Group (SSG) is an Alaskan nonprofit organization founded in 1992 by a group of parents with special needs children. At the time, there wasn’t any help for parents of children with special needs. The challenges just to get basic care for a special needs child felt impossible. The founders of Stone Soup Group wanted to change that. With limited resources, SSG has grown from a few parents running a nonprofit agency on a shoestring budget, to a staff of more than 20 highly skilled parents, family professionals and volunteers.

So what about the name you say? It’s related to the children’s fable Stone Soup. The ingredient each villager added to the soup mimics the skill and/or experience each founder used to create Stone Soup Group.This spirit of collaboration and sharing is the philosophy behind SSG.

available statewide and we help families with medical, disability, mental health and special education issues. Our programs focus on a specific need and are no cost to families. For example, Stoup Soup Group offers Parent Navigators (P.N.) who act as guidance counselors. We help parents navigate the intimidating and confusing system of services and resources. Our P.N.’s provide support and information to families during doctor visits and school meetings as well as connection to programs and people offering long-term care services. As parents of special needs children, we understand your family journey and want to help.

You can help us help local families. Parents aren’t alone. We can help. Having a special needs child can be extremely overwhelming. Nobody expects to have a special needs child so when it happens, you aren’t prepared. We work with families with special needs children from birth up to age 26. Our services are

SSG is funded by State grants, federal grants and donations. However, due to the current economic climate, grant opportunities are diminishing making our need for financial donations, business sponsorships and contributions greater than it’s ever been.

If you would like to help support the Stone Soup Group mission, please contact us and make a charitable donation. With your support, our families will be empowered with the tools and knowledge to make their children’s dreams come true.

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PHILANTHROPY IN ALASKA SPECIAL SECTION

Click Pick Give Time to think about giving in the new year BY PEG STOMIEROWSKI

A LONG VIEW BEGINS Unique to Alaska, where there is no State tax requirement, the Pick.Click. Give. program aims to facilitate individual online charitable giving from

Photo courtesy of Bean’s Cafe

ick.Click.Give. (PCG) is helping grow support for Alaska’s community nonprofit programs from Permanent Fund Dividend donations. A few years ago, an extended family crisis made Steve Handy a convert. Now he takes care to contribute to PCG and encourages others to, as well. The Anchorage man in 2009 was busy living his life when his elderly father, long prominent in the local carpenters’ union and now suffering the ravages of mesothelioma and Alzheimer’s disease, was struggling with survival in other ways. Because of extenuating (and emotional) personal circumstances, his father couldn’t be assured of a roof over his head and three meals a day. As Handy and his father both learned, Anchorage can be a tough place to be old and cold in the winter. “We were challenged to maintain the quality of life he was used to,” Handy recalls. “Never in my wildest dreams did I ever think we’d be in a subsistence situation like this. I knocked on a lot of doors, and I wasn’t too proud to do it. It was a tragic event, but it had a silver lining.” Handy began dialing charities to help stabilize his father’s prospects, and eventually his dad received cash assistance for food from the Mabel T. Caverly Center, one of the PCG charities offering senior assistance in Anchorage. Other help with his dad’s needs followed, until his father died at 87.

Boys and Girls Club Northeast Community Center.

State Permanent Fund Dividends ($1,174 this year) at the point of filing. While residents may review a list of eligible organizations at www.pick clickgive.org, they earmark personal choices when applying for the dividend at www.pfd.state.ak.us. Perhaps a close cousin to the program, observes the Rasmuson Foundation’s Jordon Marshall, is Give Minnesota, in which 0.8 percent of Minnesotans donate cash to good causes. Although the program is only vaguely comparable to PCG, he figures, participation in PCG already is 400 percent higher. Donations in Alaska’s timely new program not only held up but also increased, sources reflected, as the economy restricted in historic recession and many traditional funding sources flattened out or dried up. As of the Oct. 6 distribution of dividends, about $1.5 million was to be

paid to eligible nonprofits listed on the PFD site, according to Debbie Bitney, director of the Permanent Fund Dividend Division for the Alaska Department of Revenue. Pledge data at the close of the filing period on March 31 showed 18,726 Alaska residents made 27,829 gifts to nonprofits during the 90-day campaign. Close to 19,000 Alaskans gave $1.5 million this year, the third year of the program, the Department of Revenue announced in October once the PFD checks went out. That compares to a little over 5,000 people giving $545,000 in 2009, and 9,500 people giving $927,000 last year. The program, coordinated through a partnership of major private and public service organizations, represents long-term hope for Alaska arts, education and community service nonprofits, which form a significant sector of the State economy. Bitney said serving

www.akbizmag.com • Alaska Business Monthly • December 2011

PAI D ADVERT I SEMENT

previously as housing and finance director for Wasilla Area Seniors gave her an appreciation for the challenges at hand. Residents are assured it’s easy to give around dividend time, donations often result in federal tax write-offs, and that filing online improves accuracy and cuts down on administrative costs. The PFD division does still mail application forms to household addresses from which paper applications were received the previous year. The outreach program also emphasizes the idea that individual giving represents a chance to accomplish improvements and make a difference in your community. As public funds diminish at State and national levels, “nonprofits are providing services we all benefit from,” Marshall emphasized. “Any food bank people will tell you demand has skyrocketed and giving has not. Many people can’t give more.” In 2012, more than 400 target groups are listed, including, in the educational column, regional campuses in the University of Alaska system. All must have an independent financial audit, file returns with the IRS, and have a board of directors comprised of a majority of Alaskans. Excluded are political and religious organizations not open to the general public.

was viewed, Rasmuson sources said, as an opportunity to turn around statistics suggesting Alaskans don’t donate in big numbers, and to introduce philanthropy to more residents. Kathy Day, who works on the project for the Rasmuson Foundation, recalled sitting down with her youngsters this year and encouraging them to think about whom they wanted to support with a donation. Both chose Little League. “They each gave $50,” she said, “and it was a start.” Historically, companies here have been generous in their giving, observed Cassandra Stalzer, Rasmuson’s communications manager. In some sense, “many Alaskans have gotten used to that; when somebody else is doing it, there isn’t as much of a need (perceived). We’re trying to help them see they are a big part of that.” Results show 3.4 percent of those

HISTORY OF PROGRAM While the PCG approach was implemented in 2008, it was a few years in the advocacy, creation, development and outreach stages, supporters say, with Rasmuson, The Foraker Group, United Way of Anchorage and similar interests putting their planning heads together. It

Alaska Gov. Sean Parnell signed Senate Bill 171, which extended the PFD Charitable Contributions program and relaxed the eligibility requirements for nonprofits to qualify for the Pick. Click. Give program. www.akbizmag.com • Alaska Business Monthly • December 2011

Photo courtesy of Frank Flavin/Rasmuson Foundation

Photo by Clark James Mishler

An unidentified man outside Bean’s Café during winter 2010.

who file online for their Permanent Fund Dividend checks (more than 80 percent of Alaskans these days) are clicking to give away some of the funds. With $25 the minimum pledge and around $80 the average, some participants donate $1,000, others their whole dividend; Bitney said 46 people tuned over the entire $1,174 to charity this year. Still others give modest but equal gifts to 25 organizations, while others just give to a couple of favorites. Companies can introduce matching fund programs to boost employee giving, as the likes of Wells Fargo Bank, BP and ConocoPhillips have done, Marshall noted. Organizations are coached in how else to effectively boost giving, for instance, by advertising benefits of the program in company communications, briefing managers on being supportive and inviting speakers in from the Alaska Giving Coalition. Some graphics help is available. Public television and radio have topped the list for overall contributions, Bitney said, for two of three years. Services to struggling Alaskans rank second and third (i.e., Bean’s Café and Food Bank of Alaska), and animal welfare services fourth. The biggest obstacle, she said, has been working out the program’s technology challenges; design decisions driven by implementation deadlines, coupled with increased Internet traffic and server load, have resulted in occasional problems. Allowing pledges to be changed or added after the initial filing, she added, seems

to have resolved most concerns. PFD filers could opt to participate in PCG through August 31 this year.

ON THE FRONTLINES On the service front, there is no doubt about the suffering out there, especially in winter, and the impact of unemployment and underemployment. At Bean’s Café, more than 750 meals a day are served to those in need, many suffering from homelessness, mental illness and/or and substance abuse. More than 1,000 free meals are served at Christmas and 1,500 at Thanksgiving. Ken Miller, development director, said shelter staff members are seeing more working poor, and still a lot of people struggling with mental illness and disabilities. Many clients, he said, are coming up from the Lower 48, looking for work on fishing boats or in canneries and not finding it. He also says he is seeing more young people coming into the urban area from villages looking for opportunity, but in many cases lack the social skills needed for viable employment. Two Americorp volunteers are helping provide employment support.

To illustrate, he describes an actual client he calls “Bob S.” Individuals like Bob S. are being marginalized by financial constraints, high rental costs and a tight labor market, he said. They come to Bean’s for breakfast before going to work and even stop by on their lunch break if they have the transportation. Bob and three of his friends were baggage handlers at an airport in California and flew up to Anchorage because they heard it was easy to get work at North Slope camps, fish processing plants and construction sites. Once here, Miller said, they were confronted by the realities of high rental and living costs and lack of quick employment. They fast ran out of funds. Another meals program, The Children’s Lunchbox, has been feeding children for more than six years, since 2009 with the help of Pick.Click.Give. PCG aid has risen from $9,000 initially to more than $60,000. Children in the Muldoon area are now getting a hot supper throughout the week. In collaboration with the Boys & Girls Club at the North East Community Center, a sit-down supper is being

served on weekdays to 40-60 kids in a renovated bowling-alley kitchen. A thousand children receive four meals to take home over the weekend. Miller describes an actual Lunchbox client, whom he calls “Mary L.” She is 9 years old, her parents immigrated recently from the Sudan, and she goes to a local elementary school. Her family qualifies as Title 1 under federal poverty guidelines. She is a good student whose English is improving. The nutritious meals boost her self esteem and ability to study and concentrate. On the animal welfare front, Angie Lewis, board member, secretary and fundraiser for Alaska Dog and Puppy Rescue, said program funding has more than doubled, to $20,000, which has paid off in greater community outreach. The rescue program, which relies heavily on volunteers, helps provide animal spay and health services and to find viable homes for community and shelter dogs. Canines had been rescued from at least a dozen communities, she said, adding, “We hear and see some very ❑ terrible things.’’

www.akbizmag.com • Alaska Business Monthly • December 2011

TELECOMMUNICATIONS & TECHNOLOGY SPECIAL SECTION

Social Media Strategy Follow the 6 P’s for successful outreach BY ROSS JOHNSTON

reating a social media campaign is more than setting up a Facebook page. Social media outreach takes time and effort. The first step involves planning. While some companies are hesitant to embark on a social media campaign, there are many organizations in Alaska that have embraced it wholeheartedly. The 6 P’s of social media are steps that guide organizations in creating a successful outreach in a clearly defined framework.

● Perceive ● Purpose ● People ● Platform ● Policy & Procedure ● Participation

PERCEIVE Perceiving is the first step in the social media process. Perceiving involves looking at what people are saying about your company, industry, suppliers, customers and community. There are a lot of free tools out there like Social Mention, Google Reader and Tweet Deck that allow you to see how your company is perceived in the social media world and where these conversations are happening.

www.akbizmag.com • Alaska Business Monthly • December 2011

From these conversations, there also may be an opportunity to act. For instance, the Lower 48 experienced a heat wave this last summer. A lot of people jokingly tweeted, “It is so hot I’m moving to Alaska.” Even though this is a half-joke, Gary Scott of Thompson & Co. Public Relations sees this as an opportunity for the Alaska Travel Industry Association to reach out to potential visitors and respond on how easy it is to get to Alaska. Perceiving also is seeing what other organizations are doing and identifying what works and what doesn’t work. When Providence Alaska Medical Center set up their Facebook page two years ago, they looked to see what other hospitals were doing in the United States. The Mayo Clinic in Minnesota has a robust social media presence and had a very responsive Facebook page. Providence took note of how and in what way the Mayo Clinic was responding. Research is integral to finding out what conversations are occurring online and finding out what others are doing well.

PURPOSE It isn’t enough to have a presence, but a destination. Social media outreach should bring results whether it is thought leadership, customer service, advocacy, branding, etc. Making Strides Against Breast Cancer – Anchorage effectively used social media to drive donations for their inaugural event raising more than $130,000. Ryan Makinster, the social media chair for the event, says “Facebook posts as well as direct donation requests were an integral part of fundraising for many teams. By effectively leveraging social media the Anchorage community was able to raise funds far exceeding the $50,000 goal originally established for the event.” The event team used social media specifically to raise awareness of the event and to solicit donations. Having a stated goal will focus your outreach while engaging your target market. Without a goal, it is difficult to judge whether or not your campaign is a success.

PEOPLE It is important to define your audience with social media. Are you targeting suppliers, customers, employees or

media outlets? Once a company has defined its audience, it can decide what type of messaging is relevant to them. Some companies would like to believe that everyone is a target. In a world of clutter, however, it is the relevance that stands out. The more narrow your niche, the stronger the messaging can be and the more likely it is to be relevant to your target market. By creating messaging for a specific group, you have a greater chance of engaging and inciting action. Advertising agency Bradley Reid + Associates set up a Facebook page called the Truth about Pebble. Initially the page was set up to target everyone and provide a discussion forum about the Pebble mine project. However, what Bradley Reid found was that the people who “liked” Pebble were already Pebble advocates. Bradley Reid saw this as an opportunity. They focused on providing their advocates with recent, factual information they could share both online and off. People who like the Anchorage Concert Association page are people who put a big emphasis on performing arts and community events. Pareto’s principle states that 80 percent of your business comes from 20 percent of your clientele. The Anchorage Concert Association realizes that they can grow that 20 percent by nurturing their fans with special events, prize giveaways and queries. By interacting with fans, the Anchorage Concert Association creates stronger relationships with patrons.

PLATFORM A lot of people think only of Facebook and twitter when considering social media. However social media is anywhere people are conversing and sharing information in a two-way platform. This includes YouTube, review sites, discussion forums, the comment sections of news websites and various other online channels. Social media monitoring helps identify where the majority of conversations are taking place about your brand and will help you figure out which platform you should focus on. People tend to think of Facebook first because it is the guerrilla of the social media world. According to Facebook, there are more than 418,000 people registered on Facebook in Alaska alone.

Social media outreach should bring results whether it is thought leadership, customer service, advocacy, branding, etc. And if Alaska follows national trends, 41 percent check Facebook daily. However, that doesn’t mean that it will give the best return. Table 6, a relatively new restaurant in midtown Anchorage, saw that Twitter was a good way to engage Alaskans and to tell their particular story. By actively engaging the Alaska twitter community, Table 6 created a buzz that they would have been incapable of doing on Facebook. Scott says each social media platform takes time to manage. While it would be ideal to be on every outlet, a company must define what is important and most effective for them. For instance, a travel company may want to monitor and manage travel site feedback on sites like tripadvisor.com while another company may want to share best practices through online videos and podcasts. Having a strong social media presence does not necessarily mean having a Facebook page. There are a variety of social media outlets that may offer a better return on engagement. What ultimately dictates the platform(s) that a company uses is the goal of the social media campaign, the people that a company is trying to influence, and the resources available to effectively manage a presence.

POLICY & PROCEDURE Most companies are afraid to expose themselves on social media because they are afraid of negative or embarrassing feedback. However, brands do not exist in a void. Regardless whether or not a company participates online, consumers are constantly talking online about companies and services. There is a social media adage that says “you can’t control the conversation, but you can definitely be a part of it.”

www.akbizmag.com • Alaska Business Monthly • December 2011

Kirsten Schultz, the regional director of communication and marketing at Providence, believes every company should create a policy and guidelines for social media. This includes a response strategy for any negative repercussions social media might bring as well as “rules of engagement” for employees. For example, in health care, patient information is not appropriate for social media. Other industries may have their own rules. By focusing on potential issues, policy and guidelines bring to the forefront a lot of the perceived risks organizations might face and create an effective framework for engagement. By stating a company’s policy toward social media, it describes a company’s expectations for employees and helps prepare for potential issues that may occur.

PARTICIPATION Most people see social media mainly as a marketing function, but that is not the case. Social media covers customer service, HR, news and PR all in one. The person who is in charge of social media must have the ability to answer all queries regardless of division. They must have access to people within the organization who can reply promptly on an as-needed basis. Participation means dedicating time and resources to do it successfully. A lot of companies will dabble in social media, but maintain an active presence. A social media calendar helps make certain that there is consistent effort. Rather than blindly pick times for engagement, Scott suggests that a company look at the time of year, month, week and day that a message is most relevant to a target audience and build a calendar from there. Allocation of resources is necessary for a company to create a presence online. While this does not typically mean money, it does mean there has to be a concerted effort of employee time. While social media takes time and resources, the cost of inaction may be greater than the cost of engagement. Conversations will occur online regardless and it is good to be aware of them and have the ability to participate. By following the 6 P’s, a company will be more likely to thoughtfully engage an ❑ online community. www.akbizmag.com • Alaska Business Monthly • December 2011

SPECIAL SECTION

Telecommunications & Technology Directory

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ December 2011

SPECIAL SECTION

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ December 2011

SPECIAL SECTION

Telecommunications & Technology Directory Information Technology Companies $"% #,

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SPECIAL SECTION

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SPECIAL SECTION

Telecommunications & Technology Directory Wireless Service Providers ! (

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ December 2011

ALASKA TRENDS

BY PAUL DAVIDSON Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

Gold Market (1971 – 2011)

old is measured using the Troy ounce, which is equal to 1.09714 of the more commonly used (avoirdupois) ounce. The benchmark for gold prices is the goldfixing price determined by the five members of the London Gold Market Fixing LTD through balancing some buyers’ and sellers’ offers. In 1971, President Richard Nixon ended the policy of backing U.S. dollars with gold, allowing gold prices to fluctuate. Most gold mined in the past few thousand years is still present today; next to existing supply, demand and speculation, gold production fluctuation has little effect on gold prices. The graph illustrates historical data of average yearly gold price fixings from January 1971 to August 2011 in both dollars paid and 1971 dollars to control for inflation.

The data shows the gold price fixings of 2001 at merely half the 40-year average. The data also shows prices rising above the 40-year average for the first time in 17 years in 2007, and continuing to rise to over twice the 40-year ❑ average by 2011.

Source: London Bullion Market Association, U.S. Bureau of Labor Statistics

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

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ALASKA TRENDS Indicator

Units

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

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

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

2nd Q11 2nd Q11 1st H11 1st H11

32,862 12,975,924 200.28 223.60

32,433 12,828,663 195.46 218.58

31,153 12,462,673 194.834 217.535

5.49% 4.12% 2.79% 2.79%

Number Filed Number Filed Number Filed

August August August

74 59 11

85 65 13

12 11 1

516.67% 436.36% 1000.00%

Thousands Thousands Thousands Thousands Thousands

August August August August August

348.08 185.18 45.25 42.13 38.96

349.60 185.66 44.79 42.04 39.48

341.04 179.15 44.47 41.83 39.24

2.06% 3.37% 1.74% 0.73% -0.72%

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 Thousands

August August August August August August August August August August August August August August August August August August August August August August August August August August August August August August August August August August

352.4 58.5 293.9 17.2 16.7 13.6 19.1 22.2 15.0 69.7 6.7 37.9 6.5 10.5 25.1 6.4 3.9 6.6 4.5 15.0 28.7 42.9 31.9 40.8 8.3 24.0 11.0 79.2 17.5 24.3 5.7 37.4 19.2 3.8

355.3 61.0 294.3 17.2 16.7 13.6 19.0 24.8 17.5 69.4 6.7 37.9 6.6 10.3 24.8 6.4 3.7 6.6 4.5 15.0 28.6 42.7 31.8 41.4 8.3 24.4 11.6 79.0 17.7 24.9 6.0 36.4 17.8 3.9

346.4 56.1 290.3 16.5 16.2 13.4 19.8 19.8 16.0 67.5 6.7 36.9 6.5 10.2 23.9 6.0 3.4 6.4 4.2 15.4 27.6 41.6 30.2 38.2 10.9 21.8 11.9 81.7 18.4 25.0 6.2 38.3 19.7 4.1

1.73% 4.28% 1.24% 4.24% 3.09% 1.49% -3.54% 12.12% -6.25% 3.26% 0.00% 2.71% 0.00% 2.94% 5.02% 6.67% 14.71% 3.12% 7.14% -2.60% 3.99% 3.12% 5.63% 6.81% -23.85% 10.09% -7.56% -3.06% -4.89% -2.80% -8.06% -2.35% -2.54% -7.32%

Thousands Thousands Thousands Thousands Thousands

August August August August August

372.89 197.45 48.10 44.60 41.94

375.28 198.37 47.70 44.59 42.60

366.90 192.41 47.37 44.40 42.29

1.63% 2.62% 1.53% 0.46% -0.82%

www.akbizmag.com • Alaska Business Monthly • December 2011