BP bets on gas pipeline, buys into Anadarko deal

BP Exploration (Alaska) Inc. has agreed to buy into a natural gas exploration venture led by Anadarko Petroleum Corp. in the foothills region of Alaska’s North Slope, signaling its confidence in plans now under way to commercialize gas.BP acquired a one-third interest in Anadarko’s exclusive agreement with Arctic Slope Regional Corp. covering about 3.1 million acres, Anadarko announced Feb. 19.In exchange, the Houston-based independent received a significant interest in an unidentified satellite prospect near Prudhoe Bay and an interest in selected seismic surveys conducted by BP on the North Slope.As part of the trade, BP also purchased a one-third interest in about 230,000 acres of state leases jointly acquired in November by Anadarko and partner Alberta Energy Co. Ltd. at a state lease sale. AEC will retain its one-third interest. The companies did not disclose the purchase amount."Anadarko is actively searching for natural gas on the North Slope, and we see a lot of potential there to help meet the increased demand for natural gas in the Lower 48," said John N. Seitz, Anadarko president and chief operating officer. "BP is already a major producer on the Slope, and we’re proud to be partnering on these efforts with both BP and AEC."Ronnie Chappell, a BP spokesman in Anchorage, said his company joined in the exploration program because "we believe that natural gas is going to be moving off the North Slope before the end of this decade.""It’s a manifestation of our confidence in the effort now under way to deliver natural gas to the North American market," he said.Chappell said BP chose to join Anadarko and Alberta Energy rather than strike out on its own because company officials believe the acreage over which exploration will occur is prospective."We look forward to working with Anadarko and Alberta Energy on this effort, and we’re pleased to have them as partners," he added.The joint exploration effort is under way and includes several seismic surveys this year. Anadarko is the operator, and each company holds a one-third interest in the joint program.The exploration territory is in the foothills area of the Brooks Range region of Alaska’s North Slope, south of the existing producing fields, and stretches east-west for about 250 miles from the Colville River to the Canning River.Anadarko entered into the agreement to explore this region with the ASRC in 1998. AEC joined Anadarko in the venture in 2000 and became a one-third partner.Houston-based Anadarko Petroleum Corp. is the world’s largest independent exploration and production company, with proved reserves totaling 2.06 billion barrels of oil equivalent.

Sealaska tells shareholders it could lose up to $120 million

JUNEAU -- Sealaska will report losses of between $90 million and $120 million for last year, shareholders were told Feb. 23."It’s serious," said Ross Soboleff, Sealaska spokesman. "It’s going to take us some time to work out of this."The exact amount of the loss won’t be known until the completion of an audit around the end of March, he said. The company will write off several businesses this year, instead of over the course of several years."We’re going to make a clean sweep this year," said Albert Kookesh, board president. "Our problem right now is cash flow."As long as the company still owns a plastics company and a limestone mine, they will continue to drain cash, he said.Sealaska held the first of 11 shareholder meetings the night of Feb. 23 in Centennial Hall in Juneau. The scheduled two-hour meeting, attended by about 200 shareholders, lasted five-and-a-half hours as board members answered shareholder questions."We’re trying to be as up front with our shareholders as possible about this," Soboleff said."They’ve always got a cover story," said Ike Cropley, a member of the dissident shareholder group, Shareholders for Shareholders. "I expected to see more of an outburst among shareholders. It’s a little too calm for me."Shareholder Jocelyn Marks said shareholders also need to take responsibility for their votes, noting the board was voted in by shareholders.Sealaska losses are about one-third of the company’s book value. The company listed assets of $354.6 million in its 1999 annual report, but that doesn’t reflect the roughly 330,000 acres that the regional Native corporation owns. Those lands and the minerals they hold aren’t on the company’s books until they’re developed, Kookesh said.Sealaska was created as one of 13 regional Native corporations after the Alaska Native Claims Settlement Act was signed in 1971. The corporation has about 16,000 shareholders.Sealaska’s hemorrhage of red ink comes from operating losses and several investments the company is writing off this year, plus a bad year for the company’s investments on Wall Street, Soboleff said.The operating losses are estimated at $36.5 million while the company is writing down another $75.5 million. An operating loss reflects money lost while the $75 million figure is the loss of the market value of Sealaska’s assets.The exact amount of Sealaska’s write-offs depends on the sale of a plastics company and a limestone mine, and how much the company will write off the value of trees it bought around the Southeast village of Hoonah, Soboleff said.Three disastrous investments led to the big hit the company is taking this year. TriQuest Precision Plastics had an operating loss of $22 million last year and will write off another $23 million. Sealaska blamed a downturn in plastics and the North American Free Trade Agreement.To improve the financial outlook, Sealaska and two other regional Native corporations teamed up with AT&T Wireless to form Alaska Native Wireless and bid on 422 Federal Communications Commission licenses covering 195 markets. Alaska Native Wireless bought 44 wireless licenses for $2.9 billion in the auction. The new licenses cover 43 markets including Juneau, Fairbanks, New York City and Los Angeles, with a population of 71 million, according to Alaska Native Wireless.Sealaska also invested $32 million in a $180 million casino with the San Pasqual Indian tribe in California.

Federal regulators cut red tape from hydroelectric power project for Angoon

JUNEAU -- Angoon is one step closer to weaning itself from expensive diesel-generated electricity.A federal commission ruled that it doesn’t have jurisdiction over the proposed Angoon hydroelectric project, cutting a swath through the red tape that normally accompanies these projects, said Carlton Smith, president of Kootznoowoo Inc., the Native village corporation for Angoon.Kootznoowoo proposes diverting part of Thayer Creek’s flow into a 42-inch-diameter pipe, which will run about three-quarters of a mile to a 1-megawatt powerhouse. The creek is about seven miles north of Angoon, which is south of Juneau on the east side of Admiralty Island.The U.S. Forest Service, which Smith said has authority over the project, couldn’t comment on the Federal Energy Regulatory Commission ruling because it hasn’t been analyzed yet, said Pete Griffin, district ranger for the Juneau area.Griffin said the project will have an increased environmental sensitivity because it’s within the Admiralty Island National Monument."I feel very good about the working relationship (with the U.S. Forest Service) right now," Smith said.The Southeast Alaska Conservation Council, a critic of many regional development projects, was contacted by Kootznoowoo and didn’t have any reservations."Small hydro projects are a great way to supply small communities with power," said Aurah Landau, a SEACC organizer. "We look forward to working with them on this project."The creek supports a small run of chum, coho and pink, Smith said. He said the project would dump the diverted water back into the creek just below a set of falls that are considered impassible for salmon.Plans call for construction to begin in spring 2005 with the first power to be generated in fall 2006.A small port would be built for staging construction. Other components include roads, a 10-foot-high diversion dam, about 4,000 feet of piping to a generator plant, power lines and a submarine cable to Angoon. The project is estimated to cost $8.1 million.The amount of money Angoon residents would save depends on the amount of grants the project gets, said Mark Dalton of HDR Alaska, which did a feasibility study of the project for Kootznoowoo.Angoon residents pay 32.75 cents per kilowatt-hour, said Vern Rauscher, general manager of the Tlingit-Haida Regional Electric Authority. Juneau pays 9 cents per kwh.Angoon gets its power from two diesel-powered generators. The generators have a 1.1-megawatt capacity and would be used as backup to the hydro plant, if built. THREA recently had to pay $1.62 per gallon tax -free for diesel fuel, Rauscher said."It’s added quite a fuel component to our bill," he said.THREA supplies power to Angoon and four northern Southeast communities at the same rate, Rauscher said. But if Angoon residents are to realize the maximum savings, they will have to form their own electrical company, which would buy the power wholesale from Kootznoowoo.Dalton with HDR estimated residents would save about 12 cents per kwh if 75 percent of the project’s costs are covered by grants. For a couple of other similar-sized projects in remote villages, the 75 percent funding threshold wasn’t a problem, he said.

McNeil succeeds Loescher as top executive

JUNEAU -- Sealaska appointed its in-house counsel, Chris McNeil Jr., president and chief executive at a board meeting Feb. 23.McNeil, a Juneau-born Tlingit and Nisga’a Tsimshian, takes over after the departure of Robert Loescher at the end of January.Sealaska needed to add stability as soon as possible, said Albert Kookesh, the board’s president. He and two others were serving as an interim chief executive.Loescher resigned a month after warning shareholders of huge losses and just days before shareholder meetings were originally scheduled to begin Feb. 2. Loescher was with Sealaska 27 years, the last three as president and chief executive.McNeil, 52, earned a law degree from Stanford Law School and a master’s in political science from Yale University. He served Sealaska in various capacities from 1978 to 1986 before becoming executive vice president and general council, a position he held until 1993.Since then, McNeil worked with the Mashantucket Pequot Tribal Nation, a Connecticut tribe famous for its huge casino and gaming operations, where he served as the tribe’s Washington, D.C., representative.He was lured back to Sealaska last year, Kookesh said.Appointing McNeil as chief executive has other benefits as well, he said."He’s doing both jobs for the price of one."

Governors approve resolution supporting highway gas line

ANCHORAGE -- The nation’s governors approved a resolution Feb. 27 calling for construction of a pipeline linking North Slope natural gas fields to the Lower 48 following an Alaska Highway route into Canada."The vote was unanimous," said Claire Richardson, a spokeswoman for Gov. Tony Knowles, who pushed the proposal."Development of North America’s natural gas reserves in Alaska is important to the continued health and growth of the U.S. economy," according to the resolution passed by the National Governors Association."The largest single untapped supply of natural gas available to North America is in Alaska."The resolution recommends that the pipeline follow the Alaska Highway.North Slope oil producers, who are investing $75 million in a pipeline study, also are considering an alternative undersea pipeline west through the Beaufort Sea to the Mackenzie River in Canada, where Alaska and Canada gas could be brought south to the Lower 48.

GCI pays $10 million for 85% of pipeline-hugging fiber-optic line

General Communication Inc. plans to acquire an 85 percent interest in an Alaska fiber-optic cable system from WorldCom Inc. The system runs from Valdez to Prudhoe Bay via Fairbanks.Three Alaska Native corporations -- Arctic Slope Regional Corp., Ahtna Inc. and Chugach Alaska Corp. -- which were original investors in the system, will each own a 5 percent stake.The deal requires approval by the Regulatory Commission of Alaska, probably by late second quarter, said David Morris, GCI public affairs manager.Terms of the agreement call for GCI to issue WorldCom a new series of Class C preferred stock valued at $10 million, GCI officials said. The stock is convertible at $12 per share into GCI Class A common stock. The new series is nonvoting and pays a quarterly cash dividend of 6 percent.WorldCom is a major shareholder in GCI.General Communication Inc. has been operating the system since March 3, 2000.Kanas Telecom Inc., which was formed to construct the system, originally built the $83 million fiber-optic cable system along the trans-Alaska oil pipeline right of way and aimed to serve Alyeska Pipeline Service Co. and others.Construction on the Kanas cable was completed in 1998.Alyeska experienced outages on its voice and data systems operating on the cable, Alyeska officials told the Journal last year.Also, an avalanche on Dec. 20, 1999, suspended service on the cable for several weeks.On Feb. 24, 2000, Alyeska terminated its 15-year contract with Kanas Telecom Inc., citing unreliability of the fiber-optic cable system.Last March WorldCom acquired 80 percent of Kanas and chose GCI to operate the system. Also at that time the three Native corporations reduced their interest from 25 percent to 5 percent each.Last summer GCI made improvements to the system."The major thing we did was to look at Keystone Canyon where the avalanche occurred," Morris said. "We spent $2 million remediating that area."GCI also reburied parts of the cable to a 3 foot depth, he said. Another improvement changed the fiber-optic cable covering to a more flexible material from a steel conduit that was prone to freezing and expanding from water ingress, he said.Although GCI recorded no service-affecting outages in nearly a year, the company plans to make more improvements to the system, Morris said.GCI has entered into an interim services agreement with Alyeska to provide certain voice, video and data services, GCI officials said. GCI and Alyeska have drafted a proposed 15-year agreement due to be submitted soon for review by both companies’ boards of directors, Morris said.

Alaska Airlines seeks National Airport slots

SEATTLE -- Alaska Airlines is considering service to Reagan National Airport in Washington, D.C.A takeoff and a landing slot at the airport could be vacated by St. Louis-based Trans World Airlines, which is seeking bankruptcy protection and is the target of an acquisition bid by American Airlines.Airlines can’t apply for the slots until TWA goes out of business, and other carriers, including Continental Airlines and Delta Air Lines, reportedly also would like the service rights at Reagan National."It’s a long shot. These are highly contested slots,’’ said Jack Evans, an Alaska spokesman.The service would mark a major change for Alaska, which now serves destinations mostly on the West Coast, in Mexico and in its namesake state. Its longest nonstop flight is between Anchorage and Chicago.Evans said Alaska’s newer Boeing 737-700 jets have the range for transcontinental flights. The airline is proposing one daily round-trip flight between Seattle and Washington, D.C.United Airlines currently offers the only nonstop service between Seattle and the Washington, D.C., area.The U.S. Department of Transportation would award the slots, a procedure that could take several months.

For Department of Fish and Game, only commercial fishing pays its own way

Commercial fishing once again comes up as the biggest moneymaker by far for the entire Alaska Department of Fish and Game. A new department report released last month shows that among sport and commercial fisheries and wildlife management activities, commercial fishing is the only segment that brings in more money than it costs the state.According to state figures, commercial fishing revenues rebounded in fiscal 2000, with increased receipts from fish landings, salmon enhancement and salmon marketing taxes, and processors’ voluntary marketing assessments.The seafood industry pumped $69.2 million back into state coffers in fiscal 2000. In return, Alaska spent $47.4 million to keep its fisheries up and running. The cities and boroughs of the state receive one-half of the state’s fisheries business tax, and last year they shared nearly $20 million. For many coastal communities, those fish bucks represent the bulk of their tax base.In contrast, sport fishing revenues rang in $30.7 million, while getting $33.7 million in funding from the state. Wildlife management activities cost the state $34.8 million and returned $21.8 million to the state’s bank account.

InvestNet lists its successes

Alaska InvestNet can’t release information on investment deals concluded through its efforts, unless the information is already public. But one success cited by Deborah Marshall, InvestNet’s director, is Sitka Beverage Corp., of Sitka. The company, a start-up, is setting up a bottled water plant in Sitka at the former Alaska Pulp Co. plant in the Southeast community.Sitka Beverage found an investor through one of the investment conferences sponsored by InvestNet, Marshall said. Having secured additional equity, the company was able to secure a $5 million loan from First National Bank of Anchorage.It is now coming back for a second round of equity financing through InvestNet, Marshall said.Another success is Spectrum Wireless, an Anchorage-based firm that develops broadband fixed wireless Internet routers.Six equity investments in Alaska firms have been confirmed through InvestNet, but there may have been others, Marshall said.Alaska Growth Capital BIDCO Inc., a subsidiary of Arctic Slope Regional Corp., also can’t divulge its loans, said David Hoffman, its president. But two rural projects Hoffman can talk about include Adak Seafoods, a fish processing company started at Adak, where the Aleut Corp. is taking over a closed Navy base for commercial development.Loans from Alaska Growth Capital helped Adak Seafoods get off the ground. The company was successfully started and has now been sold to Norquest, a Seattle-based processing company.Another project helped by Alaska Growth Capital is Coastal Villages Seafoods Inc., which operates a fish processing plant in Western Alaska. The project is now in its third season.Both of these projects created economic activity and private employment in remote communities, Hoffman said.Between 1998 and 1999, Alaska Growth Capital’s loans to new businesses resulted in $6.9 million in new payroll in Alaska, of which $4.8 million in payroll was in minority-owned or rural businesses, according to the firm’s annual report for 1999.

Once-controversial spill bill passes state Senate without debate

JUNEAU -- With no debate, the Senate on Feb. 22 passed a restored version of one of last year’s most contested bills -- a proposal to bring cruise ships and other large nontanker vessels under the state’s oil response laws.Last year, a similar bill sponsored by then-Senate President Drue Pearce passed only after a power play by then-Rep. Ramona Barnes, an Anchorage Republican, forced the removal of its key provision -- that ships and the Alaska Railroad maintain contingency plans to clean up 15 percent of their oil-carrying capacity within 48 hours of a spill.The provision was replaced by a task force of government and industry representatives that produced a very similar bill for the current Legislature. The bill that passed last year still required owners to prove they could take financial responsibility for cleaning up a spill.After months of meetings and a lengthy report recommending its passage, the proposal by the Task Force on Motorized Oil Transport passed 17-1 without a word of debate. The task force asked lawmakers not to upset a hard-won compromise by amending the bill, and the bill has so far survived with only cosmetic changes."I don’t anticipate any problems with anything in the bill," said Pearce, an Anchorage Republican.Last year’s bill also passed the Senate easily but ran aground in the House, where Barnes held it in her committee over concerns that the cost of contingency plans would drive up shipping costs for Alaska fish, timber and minerals. That prompted Pearce to accuse the cruise and shipping industries of trying to kill the bill.The bill covers only ships of more than 400 gross tons, which includes cruise ships, state ferries, freighters and large fishing vessels.Sen. Robin Taylor, a Wrangell Republican, was the only dissenting vote in the Senate.Taylor said he supports the idea of the bill but worries it might hurt the owners of the tugs and barges that ply the waters of his Southeast district, hauling everything from potatoes to pile-drivers."It’s an integral part of our economy. I just want to make absolutely sure we’re not going to wind up weighing down a bunch of small business people," Taylor said.The bill now moves to the House, where a companion measure already is pending in the Finance Committee.

Murkowski measure would open ANWR

WASHINGTON -- Senate Republicans introduced an industry-friendly energy bill Feb. 26, calling the nation’s energy problems the greatest threat to economic growth. They promised action by summer.The bill, already sharply criticized by many Democrats, calls for new tax and regulatory incentives for oil and natural gas production, including opening the Arctic National Wildlife Refuge to drilling.The legislation also would expand programs to help low-income families cope with energy bills, provide new tax incentives for renewable energy sources such as wind and solar and provide a tax break for buying ultra-efficient cars, homes and appliances.Still, most environmentalists denounced the legislation, and energy-efficiency proponents said it is too heavily focused on production rather than conservation. The Sierra Club called it "a giveaway for fossil fuel producers."While Sen. John Breaux, D-La., joined as a co-sponsor, some Democrats already have promised to filibuster the measure if the provision for oil drilling in the Alaska refuge is not removed.Senate Majority Leader Trent Lott, R-Miss., said he hoped an energy package will be voted on by the full Senate sometime this summer, but that no action would be taken before the White House completes its long-term energy package.Lott, at a news conference unveiling the GOP bill, said "we’re heading for trouble" without a broad energy plan that promotes production, adding "it’s not enough to encourage conservation."He said the country is facing "an energy crisis" that, if not addressed, will pose "the greatest threat the future economic prosperity in this country."The bill, crafted by Sen. Frank Murkowski, R-Alaska, would do little to address the most immediate energy concerns -- soaring natural gas prices nationwide and California electricity shortages that threaten to spill over to other western states this summer.Murkowski acknowledged that the measure is designed to address the long-term problem of growing U.S. dependence on foreign oil. The bill seeks to reduce such dependence from 56 percent to 50 percent over the next 10 years.Calling the legislation "balanced" between conservation and production, Murkowski rejected criticism that it would primarily benefit already profitable oil companies."This isn’t a tax bill favoring Big Oil," said Murkowski, a close congressional ally of the oil industry. He said the tax benefits are aimed at small independent producers and development of marginal "stripper" wells.Murkowski said the country needs the estimated 11 billion to 16 billion barrels of oil believed to be beneath the 1.5 million acre coastal plain of the Arctic National Wildlife Refuge in northeast Alaska.And, he insisted, the oil can be developed using current technology without harming the environment. Drilling in the refuge, which is the summer calving grounds for caribou and the seasonal home to other wildlife including millions of migrating birds, has been strongly opposed for years by environmentalists.New oil production is needed to protect national security, Murkowski said.A number of senators, including Sen. John Kerry, D-Mass., have said that they will use every parliamentary tool available, including a filibuster, to block legislation including a refuge drilling provision.In addition to drilling in the Arctic refuge, the legislation also includes provisions to:* Provide tax breaks for small oil producers and construction of new refineries.* Streamline permitting processes for oil and gas pipelines.* Review the adequacy of electricity generation and power transmission grids.* Expand research and development of clean coal technology and tax incentives for use of such technology in current coal-burning power plants.* Introduce tax incentives for consumers who purchase automobiles that achieve 50 miles per gallon or more, or purchase ultra-fuel efficient homes and appliances.

Forest strikes oil at Redoubt test well

Forest Oil Corp. announced Feb. 20 successful logging and testing of Redoubt Unit No. 1, its first exploration well in the Redoubt Prospect in Alaska’s Cook Inlet. The well, drilled to a depth of 15,323 feet, contained an oil-producing zone known as "net pay" of about 450 feet. It tested at a stabilized flow rate of 1,010 barrels of oil per day from the Hemlock formation. Using pressure data gathered during the flow test, the production rate for the well is estimated to be 2,500 b/d using artificial lift, Forest Oil officials said. Gus Zepernick, Forest Oil’s president and chief operating officer, said the find is an exciting development for the company and the state of Alaska, and hopefully, "the first of many new investment projects for Forest Oil in Alaska." Gary Carlson, Alaska manager for Forest Oil, said the oil flowing from Redoubt No. 1 appears to be similar in quality to the 27-28 API gravity crude that the company now produces in its West MacArthur Field on the western side of Cook Inlet.

Kenai men take Chevy dealership wheel

JUNEAU -- A pair of Kenai men have bought Juneau’s Chevrolet dealership.The Kenai businessmen bought the 13-year-old Lewis Motors from Harley Lewis and Chuck Wescott and changed its name to Capital Chevrolet.Bob Favretto and managing partner Rob Skinner closed the deal Feb. 16 after about nine months of negotiations. The selling price was not disclosed.Favretto owns the Kenai Chrysler Center where Skinner was sales manager.The Kenai dealership, when it was bought five years ago, was very similar to Lewis Motors, Favretto said. The Kenai dealership did $7 million to $8 million a year in sales when it was bought. Last year, the business did about $21 million in sales, he said.Capital Chevrolet will be run by Skinner, who plans to revamp the business, hiring more sales people and spreading the word that buying locally is competitive with going Outside, he said. He helped Favretto’s dealership do much the same thing in Kenai and they managed to double employment and triple payroll in five years, Skinner said."It was much the same as here," he said."(Capital Chevrolet) has got tremendous growth opportunity," Favretto said.Skinner said he hopes to increase business much like the Kenai store."We’ll do it through community involvement," he said.Trying to get people to buy locally is nothing new for the local car dealerships."That’s not a revolutionary concept," said John Holmquist, owner of Evergreen Ford of Juneau. It’s an ongoing battle because some people always want to shop Outside, he said.Holmquist said he welcomes the owners and believes competition will make everybody better.

Veneer plant files for Chapter 11 bankruptcy

ANCHORAGE --Gateway Forest Products filed for Chapter 11 bankruptcy protection Feb. 26, several weeks after starting production.The struggling Ketchikan company is seeking a $5 million loan from the Ketchikan Gateway Borough after having already received $7 million in government financing.Gateway officials blamed the company’s problems on the expense of building a veneer plant, start-up costs and depressed lumber prices."We had a short-term liquidity problem," spokesman Cliff Skillings said.Chapter 11 bankruptcy protection will allow Gateway to continue to operate while reorganizing, the company said.Gateway also filed an emergency petition asking the court to allow it to pay the company’s 130 full-time employees.Gateway has accumulated $37.5 million in debt. Papers filed in federal bankruptcy court in Anchorage said several Ketchikan businesses are among the largest unsecured creditors.

ACS loses $25 million in 2000

Alaska Communications Systems reported a net loss of $25.2 million for 2000, compared to a combined operations loss of almost $18.8 million in 1999. The company also reported a fourth quarter net loss of nearly $8.5 million, compared to a $14.8 million loss for the same period in 1999.Figures for 1999 are based on combining the data for operations ACS acquired in May 1999.For the year ACS listed revenue totaling nearly $313 million, up from $299.9 million. Fourth quarter revenue totaled $79.2 million, down from $79.3 million in 1999.Local telephone revenue grew to $251.4 million, up from $249 million on a combined basis in 1999 from former ATU Telecommunications and PTI Telecommunications operations. Local access lines rose from 313,001 in 1999 to 327,534 in 2000.Long-distance revenue increased from $9.6 million on a combined basis in 1999 to $11.8 million in 2000. In 2000 long-distance subscribers totaled 57,537, up from 31,897 in 1999.Cellular revenue increased from $36 million on a combined basis in 1999 compared to $39.5 million in 2000. Cellular subscribers totaled 75,933 in 2000, up from 73,068 in 1999. ACS reports average annual revenue per unit also climbed, from $41.96 in 1999 to $44.23 in 2000.Internet revenue rose from $4.9 million in 1999 to $9 million in 2000. The company attributes the increase to startup of its digital subscriber line service as well as the acquisition and integration of Internet Alaska in 2000.

Movers & Shakers March 4, 2001

Gov. Tony Knowles has appointed Ken Freeman as his special assistant for business and gas pipeline development. Freeman previously served as executive director of the Resource Development Council for Alaska Inc. and formerly worked as staff member for the Alaska Legislature. One of Freeman’s key responsibilities will be to track issues regarding development of a gas pipeline. Resource Data Inc. has hired Syeda Khanam as a programmer/analyst. Khanam, who has earned a master of business administration degree, is fluent in various computer languages and has expertise in software development. Glen Greene has joined the company as a geographic information systems technician. Greene is pursuing a bachelor’s degree in civil engineering at the University of Alaska Anchorage. Greene has experience automating 3-D mechanical design. Bernie Klouda, owner of Bernie’s United Drug in Anchorage, has been elected secretary of the 1,100-member United Drugs cooperative of independent pharmacies. Klouda is a fellow of the American College of Apothecaries and a past president of the Alaska Pharmaceutical Association. Nan Mundy has joined Northern Economics Inc. as an economic policy analyst. Mundy received her doctorate in public administration and policy from Portland State University. Mundy’s duties will include research and data analysis for Northern Economics’ clients. Northrim Bank has promoted Catherine Claxton to vice president of commercial real estate lending. Claxton develops and maintains a commercial real estate loan portfolio, provides commercial lines of credit, and is active in new business development. Claxton joined the bank in 1994 and has more than 15 years banking experience. Northrim has hired Shirlene Wells as assistant vice president, construction loan supervisor in the bank’s construction lending department. Wells supervises the department’s support personnel and manages the workflow between them and the construction loan officers. Wells has more than 26 years of real estate lending experience. Andrew J. Schell has been promoted to chief operating officer of Tikigaq Corp. Schell, a certified public accountant, has served as chief financial officer for the corporation since joining the firm in August. Schell is responsible for all operations and management staff in the Anchorage office. Schell has more than 20 years of financial and management experience. Credit Union 1 in Anchorage recognized the following individuals at its recent annual employee dinner. Nancy Roman received the President’s Award for hiring and retaining quality personnel in a tight labor market. Annette Linehan was chosen Manager of the Year for her administrative assistance to a statewide branch system. Penny Furnish was recognized as Boss of the Year for guiding, coaching and motivating employees. Nicki Eshleman was selected Branch Manager of the Year for successfully operating a "remote" branch while exceeding loan and operational goals. Alana Wooten became Assistant Branch Manager of the Year by demonstrating professionalism and positive attitude in assisting members and co-workers. Earnest Howard received the Zip Zaber Award for dedication to teamwork, cooperation and community contributions. Gov. Tony Knowles has appointed Diane Jacqueline Heard of Eagle River to the State Board of Education and Early Development. Heard served the last five years as executive director of the Alaska Women’s Resource Center in Anchorage. Heard previously worked at KSKA public radio, first as business manager and later as general manager. Eugene Asicksik and Sandra Moller have been elected to the World Trade Center Alaska board of directors for 2001. Asicksik is president and chief executive of Norton Sound Economic Development Corp. Moller, who also was elected to serve as board secretary, is chief executive of Aleut Enterprise Corp. Ron Lance, general manager of United Airlines, was re-elected as board chairman. The Anchorage Assembly has authorized the appointments of Ralph Samuels and Morry Hollowell, both Anchorage Chamber of Commerce board members, to municipal commissions. Samuels was appointed to the Budget Advisory Commission. Samuels, past chamber chairman, is operations manager for Pen Air. Hollowell, vice president of Yukon Equipment, was appointed to the Port Commission. Denise Thompson, chamber staff member and clean-up program coordinator, also was appointed to the budget commission. In addition Sue Linford, of Linford of Alaska and past chamber chairwoman, was appointed to the Port Commission. William Anderson Jr. of Kodiak has joined Koniag Inc. as senior vice president of finance and administration. Anderson is a former member of the Koniag board of directors. Anderson most recently served as finance director of Afognak Native Corp. and previously served as vice president finance at ICRC Inc., a second-tier subsidiary of Koniag. Kristi Brenock has joined Providence Alaska Medical Center as marketing coordinator. Brenock most recently was employed as communications manager in the university relations department at Ball State University in Indiana. Brenock has six years of marketing and public relations experience. Rodney D. Udd, president of Anchorage Chrysler Center Inc., was chosen as a recipient of the 2001 Time Magazine Quality Dealer Award. Udd was honored at the opening of the National Automobile Dealers Association convention held recently in Las Vegas. Udd is one of 61 dealers from more than 20,500 nationwide nominated for the 32nd annual award. The program recognizes new car dealers for exceptional performance in their dealerships and for distinguished community service. Thomas A. Turner of Alaska Business Insurance recently attended the Arizona Institute, an advanced professional development program held annually by the Society of Financial Service Professionals in Tucson, Ariz. Turner is a chartered life underwriter. Turner has been employed by the firm for 10 years and has 28 years of insurance industry experience. The institute features five days of educational programs that include topics such as regulatory challenges, business planning strategies, estate preservation, long-term care issues and retirement planning needs. John Wheatley has joined Brady & Co. as senior vice president. Wheatley has been in the surety profession for 30 years, spending the last 18 years in Alaska. Wheatley most recently was employed by E&S Brokers and previously by Willis of Alaska.  

Bulletin Board March 4, 2001

In gear BP Exploration (Alaska) Inc. will build a $7.1 million community center south of the company’s Midtown Anchorage headquarters. The center will serve as a meeting and training facility for nonprofit organizations and feature interpretive and interactive displays about technologies used in oil and gas development. The 12,000-square-foot facility will consist of three "pods" connected by a glass corridor. Groundbreaking is planned for the spring, and exterior construction is scheduled for completion in the fall. The center is scheduled to open in mid-2002. Wells Fargo has opened a foreign exchange office at its Anchorage 5th Avenue mall store. The location will offer a variety of exchange services for local businesses and foreign travelers including buying and selling 30 different foreign currencies and processing foreign currency drafts and wire transfers. Foreign Exchange Services is located in Wells Fargo/National Bank of Alaska mall branch. Hours of operation are 10 a.m. to 6 p.m. Monday through Saturday. Xerox Corp. has named OfficeTech Inc. an authorized sales agency for Xerox engineering systems. OfficeTech, with headquarters in Anchorage, now represents Xerox’s complete line of black and white and color engineering plotters and printers. OfficeTech recently purchased several Xerox dealerships in Spokane, Wash. and Coeur D’Alene, Idaho, nearly tripling the company’s size. SiSTech Inc., computer consultants with offices in Anchorage and Wasilla, is expanding its networking and hardware/software support services. The firm currently provides data management, web development and computer support services to small- and mid-sized Alaska businesses. Marc A. Davis, a certified network and support technician with more than 10 years experience, has joined SiSTech in its company expansion. Alyeska Prince Hotel in Girdwood did not renew its property franchise agreement with Westin and Starwood Hotels March 1. The decision not to renew at the end of the five-year contract was made in conjunction with a similar recent move by the four Hawaii Prince Hotels and Resorts. The Alyeska Prince Hotel hopes to build on its branding and partnership with the 83 Prince hotels and resorts worldwide. No management or staffing changes will take place as a result of the franchise agreement ending.M Media More than 120 ice sculptors from around the world will participate in the 2001 World Ice Art Championships in Fairbanks March 7 to 18. Acclaimed artists will create more than 100 sculptures ranging in height from 6 feet to 30 feet and weighing between 7,800 and 40,000 pounds. In regards to the clarity of Fairbanks’ ice, a visiting sculptor dubbed it "The Arctic Diamond." The sculptures will be displayed in Ice Park off Phillips Field Road. Public viewing is from 10 a.m. to 10 p.m. March 7 until the ice melts usually at the end of March. For more information, call 907-451-8250. The Alaska Native Heritage Center is the site of the second annual All-Alaska Native Juried Art Show through March 31. Funded in part by the Alaska State Council on the Arts, the show will be open to the public from noon to 5 p.m. on Saturdays and Sundays, or by appointment. Many forms of traditional and contemporary Alaska Native art, ranging from basketry, carving and doll making to painting and sculpture will be on display. For additional details, contact Cindy Pennington at 907-330-8015. Much obliged AT&T has selected researchers from the University of Alaska Anchorage and from six other universities to receive AT&T’s Industrial Ecology Faculty Fellowship. The winning researchers receive $25,000 and are designated AT&T Faculty Fellows in Industrial Ecology. The project being funded at UAA will employ logistics systems that substitute information flows for on-site visits and model the industrial ecology involved to quantify the materials, energy and labor used, and measure the cultural, social and environmental impacts. Additional corporate donations announced recently will aid KAKM Channel 7 public television in meeting a federal government mandate to convert from its current analog system to digital technology. The donations included cash gifts of $30,000 from Alyeska Pipeline Service Co., $25,000 from Lynden Transport Inc. and $10,000 from Ribelin, Lowell & Co. KAKM Channel 7 is launching a $3 million capital campaign to raise funds necessary for the conversion. Public stations have until 2003 to convert. Sundries Alaska Press Women is offering scholarships to Alaska residents who are college or university students planning a career in a communications field. For additional information, contact Connie Graffis at 907-273-9414. The application deadline is March 14.  

Calendar March 4, 2001

Confabs The Anchorage Chamber of Commerce is planning a municipal election candidates forum for noon March 5 at the 4th Avenue Theater. Anchorage Assembly and Anchorage School Board candidates and incumbents will debate city and school district issues. For additional information, call 907-272-2401 or visit (www.anchoragechamber.org). The Mat-Su Borough Small Business Development Center is offering a seminar entitled "Introduction to Quick Books" from 9 a.m. to noon March 6 at the SBDC office, 201 N. Lucille St., Suite 2-A, Wasilla. The fee is $10. Registration is required. For more information, call 907-373-7232. The Greater Fairbanks Chamber of Commerce is holding its general membership luncheon at noon March 6 in the Westmark Fairbanks. Col. Ollie Hunter, deputy commanding officer for the U.S. Army in Alaska, is the scheduled speaker. The luncheon cost is $11.25. For more information, call 907-452-1105. The Greater Soldotna Chamber of Commerce is holding its weekly meeting at noon March 6 at the Riverside House, 44611 Sterling Highway. Ann Campbell, chairwoman of Alaska Travel Industry Association, is the scheduled speaker. For more information, call 907-262-9814. The Greater Wasilla Chamber of Commerce is holding its luncheon presentation from noon to 1 p.m. March 6 at the Mat-Su Resort, 1850 Bogard Road. The two-part program will feature an economic outlook for Alaska by David Reaume, regional economist, followed by a live Juneau update teleconference with legislative delegates. Program fees are $3 for members and $5 for others. For more information, call 907-376-1299. The Kenai Peninsula Small Business Development Center is sponsoring a seminar entitled "Examining Your Bed-and-breakfast Business" from 1-4 p.m. March 6 at the Kenai Peninsula College Kachemak Bay Campus in Homer. The cost is $15. For more information, call 907-262-7497. The Greater Palmer Chamber of Commerce is holding its open meeting forum at noon March 7 at the Palmer Moose Lodge, 1136 S. Cobb St. The forum will provide updates on local economic development and agency reports as well as networking opportunities. The cost is $9. For additional information, call 907-745-2880. The Kenai Chamber of Commerce is holding its weekly meeting at noon March 7 at the Old Town Village Restaurant, 1000 Mission Ave. "Caring for the Kenai" is the program topic. The luncheon cost is $10.50. For more information, call 907-283-7989. WOMEN$fund, a program of YWCA of Anchorage, is offering a free introduction to entrepreneurship workshop from 6:30-8:30 p.m. March 7 at the Older Persons Action Group building, 323 W. Third Ave. For details, call 907-274-1532 or contact ([email protected]). The Resource Development Council for Alaska Inc. is presenting a program at 7:30 a.m. March 8 at the Petroleum Club of Anchorage, 3301 C St. John Barnes, Alaska regional manager for Marathon Oil Co., will report on Cook Inlet operations. Breakfast for members cost $12 and $15 for others. Reservations are required. For more information, call 907-276-0700. The Anchorage Small Business Development Center is sponsoring a core seminar on starting a business from 8:30 a.m. to 3:30 p.m. March 8 at the SBDC office, 430 W. Seventh Ave. A core seminar on developing a business plan is scheduled from 8:30 a.m. to 3:30 p.m. March 9 at the same location. Individual seminars cost $30. Core seminars taken together cost $45. For registration, call 907-272-7232. The Mat-Su Borough Small Business Development Center and the State of Alaska Department of Labor and Workforce Development, Wage and Hour Administration, are offering a free seminar on wage and hour laws for employers from 9 a.m. to noon March 8 at the SBDC office, 201 N. Lucille St., Suite 2-A, Wasilla. Registration is required. For more information, call 907-373-7232. The Alaska World Affairs Council is presenting a program at noon March 9 at the Hilton Anchorage Hotel. Tom Gold, associate professor of sociology at the University of California, Berkeley, will discuss "Taiwan’s Year of Living Dangerously: The First Anniversary of Chen Shu-bian’s Election." Program lunch fees are $17 for members and $20 for others. For more information, call 907-276-8038.  

KeyBank economist sees small chance of recession; slow growth more likely

The U.S. economy probably won’t slip into a recession despite recent slowdowns, according to an economic consultant for KeyBank Alaska."We put the chances of a recession at one in four, but it will feel like a recession," said Jeff Thredgold, who publishes a quarterly economic newsletter for KeyBank Alaska and is president of Thredgold Economic Associates of Salt Lake City.Thredgold expects the U.S. economy will post a first quarter growth rate of 1 percent, contrary to two consecutive quarters of negative growth required for a recession, he said.Thredgold spoke Feb. 14 to bank officials and others at the Anchorage Marriott Downtown.Further, two factors can shore up the economy against a recession: the Federal Reserve Board’s ability to cut interest rates and the federal government’s ability to cut taxes, he said. The Fed already has trimmed interest rates this year, and Thredgold expects two more cuts through the second quarter."Economic expansions don’t die of old age. They die of disease. This economy has been pretty disease free," he said.That health is indicated by fiscal surpluses, several years of economic growth and record low unemployment rates around the country, he noted.The current national unemployment rate rose slightly to 4.2 percent, up from 4 percent for the two previous months, he said. Thredgold also sees low unemployment rates in regions, including 1 percent in Denver and 0.9 percent in Des Moines, Iowa.Anchorage’s unemployment rate is about 4.1 percent, up from 3.9 percent last year, yet still in record low territory for the state’s history, Thredgold said.In his winter 2001 newsletter for KeyBank Alaska, he reports the state unemployment rate will likely increase for 2001 and 2002. Also, the consultant believes 2001 job growth in the state will inch up from 2000, while new jobs created in Anchorage probably will decline from last year. In 2000 roughly 5,000 net new jobs were created, with almost 80 percent generated by the trade, transportation, government and business services sectors, the newsletter said.A tight labor market should continue for the next several years, he said.Wage statistics show a differing earning potential between college graduates and people who do not pursue a post high school education, he said. "In 1980 the average college graduate made 25 percent more than those without a degree. Now they make 90 percent more," he said.Anyone who secures vocational or technical training after high school increases their earning by 15 percent to 20 percent over those people with only a high school degree, he said.Inflation should be held in check by several factors, he said. Competition in many sectors should stave off inflation, Thredgold said. Another factor is bold consumers who hold the line on prices and will either negotiate retail prices, shop the Internet or find it at Wal-Mart, he said.Thredgold listed critical industries of the future: technology, transportation, telecommunications, financial services, entertainment and biomedicine. "All are now dominated by the U.S.," Thredgold said.

Grocer seeks arbitration

Operators of six now closed Alaska Marketplace stores have filed for arbitration in Seattle against Safeway Inc., the former owner of the stores.Seattle-based Associated Grocers Inc. and Northwest Retail Ventures LLC filed a demand for arbitration Feb. 8 with the American Arbitration Association, according to Robert Hoyt, Northwest Retail Ventures chairman."Arbitration is something we filed because we think there’s some things that need to be explained," he said.Hoyt contends that Safeway didn’t live up to its part in a deal with the Alaska attorney general’s office to divest seven stores."They handed us stores that were doomed from the start," he said. "Safeway let the stores run down prior to the sale (to Northwest Retail Ventures)."Richard Near, Safeway’s Alaska general manager, said he could offer few details since the case is under way."They have their claims. We have ours," he said.Attorneys continue to negotiate a potential settlement or the case could go to court, he said.State officials required Safeway to sell six former Safeway stores and one Carrs store as part of a deal to acquire Alaska’s largest grocer, Carr Gottstein Foods Co., with 49 stores across the state. In August 1998 Safeway said it planned to buy Carrs for $330 million, but the state later ruled the acquisition would violate state antitrust laws and called for the grocer to divest some stores.In October 1999 Northwest Retail Ventures of Seattle, including investors Associated Grocers and Bristol Bay Native Corp., agreed to buy six of the divested stores. Northwest Retail Ventures did not buy the Safeway store at University Center in Anchorage.Last August Alaska Marketplace closed three of its six stores, citing financial losses. Those stores, located in Eagle River, Wasilla and at 5530 E. Northern Lights Blvd. in Anchorage, were later followed by the closure of the Fairbanks store plus two other Anchorage stores in December.Alaska Marketplace operators claim Safeway breached terms of its sale agreement and terms laid out by the attorney general’s office. That agreement called for Safeway to "take such actions as are necessary to maintain the viability, marketability and competitiveness of each such divestiture asset to prevent the destruction, removal, wasting, deterioration or impairment of each such divestiture asset, except for ordinary wear and tear," until the divested store was sold.Among other claims, Hoyt said Safeway allowed some shelves to go bare, causing customers to shop elsewhere before Alaska Marketplace took over operations."In reality we thought we’d bought viable stores," he said.Associated Grocers and Northwest Retail Ventures are seeking $7 million in monetary damages based on an analysis of losses incurred plus expenses including attorney’s fees as well as equitable relief in cash, Hoyt said."A lot of money was lost by investors and suppliers, and nobody got the results they were looking for," he said.Some of the money would be used to pay creditors, he said.The state attorney general called for the divested stores to be operated as grocery stores for three years from the date the deal was finalized in February 1999.Hoyt said his company has been unsuccessful in finding any other interested grocers due to the cost of losses and union wages as well as a competitive market led by major players Safeway and Fred Meyer.Hoyt said he would like to sell the closed stores to a nongrocery player to cover losses.Assistant attorney general Ed Sniffen might allow a sale to a nongrocery company "only if we were convinced there was no possibility or that it would be very unlikely that there would be another grocery store interested," he said.Such a change would be considered differently for each store, he said. For example, Wasilla now has more grocery competition with a Fred Meyer than when Safeway and the state sought to preserve a competitive market, he said. The Fairbanks market also might have sufficient grocery players so the store could be run as a nongrocer, he said.In Anchorage, however, the scenario is more complicated, Sniffen said.The attorney general’s office would do an analysis before ruling, he said.Arbitrators are now being chosen and the arbitration process could take several months, said Hoyt who joined Associated Grocers in July."We feel we’re the victim here. We’re not going to take it lying down. We got skinned good," he said.

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