April 2009
Northern Star
Anchorage is a natural destination
for business and recreation
business
W
hen Will Anderson looks out
his office window at Anchorage’s skyline, he sees a city
that has come a long way from the tent colony it
was in 1915. At that time, Anchorage was a
construction camp for the Alaska Railroad.
Today it is a medium-size city of 290,000 that
is vibrant with international commerce and
advanced-technology industries.
From his window, Anderson sees new office
buildings with full parking lots, and busy city
streets—signs of a sturdy regional economy.
The panoramic backdrop to the city streets
and buildings is a constant reminder of place:
Mountains—some nearby, others rising tall in
the distance—nearly ring the city. The white
mass of Mount McKinley, North America’s
highest peak, bulks up the horizon to the north.
To the southwest is Mount Redoubt, an active
volcano and a reminder of the incredible natural forces responsible for everything from rich
mineral deposits in the region to the incredible
scenery that makes Anchorage a world-class
tourism destination.
Anchorage’s story since 1915 has been compelling, and it’s just a blink in historical context.
Anchorage is a vibrant business hub,
in a quintessential Alaska setting,
Alaska Airlines Magazine
April 2009
67
business
Alaska Airlines Magazine
April 2009
ASRC’s portfolio includes ASRC Energy Services, a
major oil-services contractor, also based in Anchorage. Anchorage-based Doyon Drilling, owned by
Doyon, is one of the state’s top oil-drilling companies.
Multiply Koniag, ASRC and Doyon several times,
and a picture emerges of the diversity of enterprises
managed by Alaska Native corporations. Almost all
of the Native corporations in Alaska, including
Koniag, have corporate offices in the city. From
Anderson’s office he can see Arctic Slope Regional
Corporation’s building across C Street, Anchorage’s
main business thoroughfare. Down the street is
Cook Inlet Region Inc. and Bristol Bay Native Corporation. Chugach Alaska Corporation has its new
building nearby on 36th Street, and NANA Regional
Corporation is not far away.
“The importance of these corporations in
strengthening the regional economy can’t be understated,” says Bob Poe, an Anchorage business consultant. “We have Alaskan-owned companies based
in Anchorage, with a pool of capital, that prefer to
invest at home when it is possible.”
In 2006, according to the latest data available,
the 13 Native regional corporations, plus three of
the largest Native village
corporations, earned
combined revenues of
nearly $7 billion and had
profits of approximately
$541 million.
A quick look at the
directory of offices in
the same building as
A commercial gillnetfishing boat works the
waters of Cook Inlet with
Mount Spur in the
background.
Will Anderson leads
Koniag Inc., a Native
regional corporation
that has operations and
interests far beyond
Anchorage.
chris arend
Anderson is an Alaska Native from Kodiak, and he is
the president and CEO of Koniag Inc., the Native
regional corporation for the Kodiak region, 200
miles southwest of Anchorage. Today the company
Anderson leads, and a dozen other Alaska Native
corporations like it, is a big economic force in
Anchorage. These corporations do billions of dollars
in business around the world and bring hundreds of
millions of dollars in profits home to Alaska, where
much of it is spent by Native corporation shareholders or invested in local businesses.
Koniag is one of 13 Native regional corporations
formed under the 1971 Alaska Native Claims Settlement Act to manage the money and land that Native
groups received from the federal government. Since
the act passed, the corporations have become quite
diverse—and prosperous. Many own advancedtechnology companies, operating in Alaska and
elsewhere, that are at the leading edge of their
fields. Koniag, for example, owns Angeles Composite Technologies, which manufactures composite
components for the aerospace industry. Customers
of the Port Angeles, Washington–based company—
a partnership with Doyon Ltd., a Fairbanks-based
Native corporation for Interior Alaska—include
Boeing, for its 737 series of airliners, and Lockheed
Martin, for its advanced F-22 Raptor fighter jets.
Other Koniag companies specialize in technical
services, such as hydraulic systems, and information
and telecommunications-security systems. One firm
helps business clients learn how to work in the
federal-contracting system. Koniag’s newest acquisition is Alaska-based Dowland-Bach, which specializes in advanced process-control systems for the
petroleum industry. With the purchase, Koniag
hopes to secure a role in the $30 billion-plus pipeline that would move natural gas more than 1,700
miles from Alaska’s North Slope oil fields to Alberta
for distribution around North America.
Koniag isn’t the only Native corporation with a
technology focus. Arctic Slope Regional Corporation, of Barrow, has its major offices in Anchorage.
daryl pederson / alaskastock.com
It’s quite possible that Will Anderson’s ancestors
traded, hunted and fished in the Cook Inlet area
generations before outsiders came to search for gold,
build railroads and build a city that has become not
only the most populous in the state, but also the
center of business for Southcentral Alaska.
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April 2009
Alaska Airlines Magazine
business
Alaska Airlines Magazine
April 2009
courtesy: pnd engineers inc.
While a diverse range of innovative companies adds
strength to the Anchorage economy, Scott Goldsmith, senior economist of the university’s Institute
of Social and Economic Research, notes that it is the
oil industry, and the state’s strong finances thanks
to oil revenues, that underpin much of the regional
economy and make Anchorage a good place to do
business.
Directly and indirectly,
petroleum generates about
a third of the state’s economic activity, Goldsmith
says, but the industry’s
influence on the economy
runs much deeper. Goldsmith attributes as much as
half of the state’s economic
growth since Alaska
became a state in 1959 to
petroleum, in one way or another. The state’s ample
oil income, for example, has allowed the state to
maintain a low level of taxation on non-oil businesses, he says, and that has been an incentive in
developing diversified Alaska industries.
Because of the impact oil revenues have on the
city and state, Alaskans watch the oil-and-gas industry carefully. Recent drops in worldwide crude-oil
prices—now less than one-third of the peak price of
2008—have led to declines in revenues, which cut
into exploration and drilling work. But most large
oil-industry projects—such as the proposed naturalgas pipeline—typically involve long lead times that
span the cycles of commodity prices.
Managers of Alaska’s oil-producing companies are
watching expenses and even making some cutbacks,
but the industry is committed to keeping the oil
fields on the North Slope and in Cook Inlet flowing
at full throttle. Some oil firms are continuing to
chris arend, courtesy: Providence health systems
Koniag reveals the diversity of Anchorage’s business
community. One of the companies is TDX Power,
owned by the Native village corporation for St. Paul,
in the Pribilof Islands. TDX is developing a niche in
renewable-energy systems, including wind and
hydro projects, for small communities. It is also
developing a large, $1.7 billion hydro project at Lake
Chakachamna, west of Anchorage.
On the building’s lower floor is Alaska Aerospace
Development Corp., a state-owned corporation that
operates the Kodiak Launch Complex, the only non–
federally owned rocket-and-satellite-launch facility
in the United States. Alaska Aerospace works with
the U.S. Missile Defense Agency in testing ballisticmissile interceptors, and it launches satellites into
polar orbits for the Air Force. NASA also has used
the facility in the past.
PND Engineers, another locally owned firm, is
also located nearby. A long-standing part of Anchorage’s engineering community, PND recently teamed
up with CCI Inc., a subsidiary of Bristol Bay Native
Corporation, to design a major port facility in southern Iraq using a patented technology PND developed.
Keith Burke, president of CCI, sees this as an
example of two Alaskan firms collaborating on an
international project, with CCI combining its federal and military-construction experience with
PND’s engineering expertise.
PND has won awards for its innovations over the
years. Dennis Nottingham, the firm’s president, says
the challenges the company often faces in working in
some of the more remote and rugged regions of
Alaska have fostered an environment of creative
thinking that has led to innovative design work.
These inventive engineering skills are now being
exported all over the world, he says.
As local firms compete for regional and international business, Nottingham says, it helps to have
the support of a strong engineering department at
the University of Alaska Anchorage. The university
helped PND, for example, with an independent
verification of the company’s Open Cell dock technology that helped the company sell the design to
the U.S. Army Corps of Engineers and other clients.
Anchorage employers such as Nottingham appreciate the fact that the city’s work force is young
and well-educated. The median age of workers in
Anchorage is 32 years, and one-third of residents 25
and older have a bachelor’s degree or higher.
Dennis Nottingham of
PND Engineers attributes
Anchorage’s strength to
a young, creative and
well-educated work force.
Providence Health &
Services Alaska is the
largest private employer
in the state, and the
health-care sector
continues to grow
in Anchorage.
71
explore, confident that today’s low prices
are just another cyclical dip.
So far in this uncertain world economy,
business appears relatively stable for
Alaska, and for Anchorage. In fact, total
employment in the state was still on the
rise at the end of 2008. Wage and salary
jobs were actually up 2,300 in December
compared with December 2007.
“Alaska is one of the few states whose
economy continued to grow in 2008,” says
Dan Robinson, an economist with the state
Department of Labor and Workforce Development. The state’s unemployment rate is
rising slightly, but Robinson attributes that
largely to the number of unemployed people from outside the state coming to Alaska
to look for work. The number of jobs in
Alaska hasn’t declined, he says. Some
employers have even welcomed the inmigration of workers because it helps
relieve shortages in some skill areas.
Bill Popp, president of the Anchorage
Economic Development Corporation, is
upbeat. “We’re expecting a very slight
decline in 2009 of about 100 jobs,” he says.
“It’s essentially going to be flat. But flat is
good in this national economy.”
AEDC is a nonprofit that promotes local
business development and helps firms
interested in locating in Anchorage make
contacts with local officials and other businesses. The corporation also maintains
Web-based tools to help firms do research
on costs and business-site locations in
Southcentral Alaska. AEDC also monitors
the pulse of business confidence in the
community. A recent survey found business
leaders cautiously optimistic, with more
than half expecting 2009 to be more profitable than 2008, and a substantial number
expecting no changes in revenues or profits.
Popp expects employment gains to
come from health care and, surprisingly,
continued retail growth.
When Target opened its second Alaska
store in Anchorage last fall (the first opening was in Wasilla), it was one of the most
successful store openings in the chain’s
history—a testament to the level of disposable income the city’s residents enjoy.
Median annual household income in
Anchorage is $63,656, compared with the
national average of $48,451.
Target plans to open a third store in
2009, in south Anchorage, and several
other national-chain-store companies have
announced new stores for 2009, including
Kohl’s, Lowe’s, Best Buy and Sports
Authority, all in the new Tikahtnu Commons shopping center developed by Cook
Inlet Region Inc. in partnership with
Browman Development Co. of Walnut
Creek, California.
Popp interjects a note of caution, however. “Anchorage’s retail sector is not
immune to the national economy,” he says.
Declining sales and revenues on the
national level can impair the ability of
national chains to open new stores, despite
how good things look in Alaska, he says.
Popp sees health care as one area that
seems recession-proof, and it is one of
Anchorage’s fastest-growing industries.
Overcoming Buffaloes at Work & in Life
Dr. Vincent Muli Wa Kituku, a native of
Kenya and resident of Idaho, established
Kituku & Associates in 1995 to provide
new approaches for dealing with
workplace challenges. He likens the
unpredictability of change/challenges
to life with African buffaloes that invaded
African villages without warning,
devastating social structures,
uprooting the harmonious
livelihood of villagers and
leaving them feeling insecure
and stressed out.
During chaotic times, people often think there is no
solution for their perceptively overwhelming situation.
They wonder, “Why do we have to change what we are
doing?” Some think they are not responsible for making
change work. Vincent says, “When a buffalo invades your
village, you cannot waste time blaming others, whining
or wishing it had not happened.”
His high energy, content filled and entertaining keynote
and training programs challenge and inspire audiences for maximum impact mind shift. They learn to set
themselves apart at work and in life, re-discover talents
and resources they need for growth, thrive by repeatedly
72
providing exceptional services, be involved with something bigger
than a career and move forward without leaving life behind.
R. Scott Johnson, Program Manager for Hewlett-Packard said his
group was moved by Vincent’s “powerful and encouraging
message…his motivational style is very unique, pointing each of us
to look inwardly and in conjunction with each other as a team.”
Dr. Kituku is one of the less than 7%
of speakers to earn the coveted
Certified Speaking Professional (CSP)
recognition, presented by the National
Speakers Association. His storytelling
skills have won awards for both spoken and written words. He has been
the motivational speaker for
the successful Boise State University
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received both his MS and Ph.D.
from the University of Wyoming.
For more information call
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April 2009
Alaska Airlines Magazine
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Alaska Airlines Magazine
April 2009
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“Health care has seen strong growth in
recent years due to population increases in
Southcentral Alaska and the growth in
services that were formerly only available
out-of-state,” Popp says.
In Anchorage, this has led to a continuing expansion of Providence Alaska Medical Center, the region’s major hospital, as
well as development and growth of the
Southcentral Foundation as the operator of
a major hospital and health facilities for
Alaska Natives.
This year, Southcentral Foundation will
complete the third building phase of its
Anchorage Native Primary Care Center
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The Anchorage travel industry has seen
solid growth of 6 percent to 9 percent over
the last several years. As measured by
bed-tax revenue, travel business increased
8.8 percent for 2008 over 2007, according
to Julie Saupe, president and CEO of the
Anchorage Convention & Visitors Bureau.
And that pace held through the fourth
quarter, as well.
The greatest strength in travel this year
is in the meetings business, driven by
Anchorage’s position as the business hub
for the region, as well as solid, long-term
bookings from a wide assortment of associations. One of the big draws for such
meetings is the new Dena’ina Civic &
Convention Center, which opened last fall
within blocks of more than a dozen downtown hotels. The facility more than triples
civic and convention capacity and provides
a setting that reflects the city’s spectacular
natural surroundings.
“It’s a beautiful new facility that certainly makes a nice backdrop to a meeting,” Saupe says.
While ACVB has representatives traveling to areas such as Chicago, Washington,
D.C., and the Pacific Northwest to promote
Anchorage as a travel and meetings destination, Saupe says the ACVB has also
launched a “grassroots campaign” to
encourage local residents to invite family
and friends from outside the state to visit
Anchorage and join in the celebrations of
Alaska’s golden anniversary of statehood.
April 2009
Alaska Airlines Magazine
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“We want to give residents some buy-in on
the influence they can have on the Anchorage market,” she says.
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One business in Anchorage that Popp
expects to level off after several years of
sharp growth is business and professional
services, primarily in engineering and
other technical fields such as environmental services. These fields experienced sharp
growth in 2007 and 2008 as activity in the
oil, gas and minerals industries soared in
response to high commodity prices.
“The recent declines in oil and basemetals prices are affecting companies’
future spending and development plans. In
turn, this affects fields such as engineering, architectural and related services,”
Popp says.
However, the planning and predevelopment work for the natural-gas pipeline is
expected to keep things busy in 2009 for
many Anchorage engineering and technical
services firms. Two groups are planning
competing gas-pipeline projects. The
Denali group formed by North Slope oil
companies BP and ConocoPhillips; and
TransCanada Corp., an independent pipeline company, have both opened Anchorage
offices.
The Denali group recently awarded a
major contract to Fluor WorleyParsons
Arctic Solutions, a joint venture that will
include Anchorage-based firms in the
engineering of a gas-treatment plant on the
North Slope, an essential part of the pipeline project. This plant by itself is a megaproject, with capital costs estimated
between $4 billion and $5 billion.
Throughout its history, Anchorage has
been a home base for the mining industry,
and the growth of mining in recent years
has been good for Anchorage. For example,
about half the workers at the Red Dog Mine
in Northwest Alaska, the world’s largest
zinc mine, live in and near Anchorage. Zinc
prices are down, but the mine operator,
Teck Alaska, believes it can avoid layoffs.
While prices for zinc are down, gold
prices are holding firm for Alaska’s gold
mines, such as the Fort Knox and Pogo
mines in Interior Alaska, as well as the
April 2009
Alaska Airlines Magazine
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Greens Creek Mine near Juneau, which
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Anchorage. The support and supply center
for all of these projects is Anchorage.
Anchorage is also a large commercial
fishing community. Seafood has been a
mainstay of Alaska’s economy since the late
19th century, and today Anchorage is one
of the service and support centers for the
rich fisheries in the Gulf of Alaska and
Bering Sea. Several thousand commercial
fishermen also live in Anchorage.
The fishing industry has its ups and
downs with cycles in harvests and markets,
but it is now broadly diversified. Fisheries
analyst Chris McDowell expects the total
value of harvests to decline in 2009 from
strong years in 2007 and 2008, but he still
expects a good year, with levels close to
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April 2009
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In the towers overlooking Anchorage, in
the busy shops downtown and in the suburbs, and on the wilderness trails that
surround the city, residents consider themselves lucky. They live in a state blessed
with natural resources and work in a business community that thrives at home,
around the state and around the world.
Tim Bradner is a business writer for the
Alaska Journal of Commerce and co-editor
of the Alaska Economic Report.
getting there
Alaska Airlines serves Anchorage
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79