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TELECOM & TECH | BUILDING ALASKA | FIRST ANNUAL BEST OF ALASKA BUSINESS AWARDS

July 2016

Digital Edition


LEADER In All We Do Oil Field Services Government Contracting Natural Resources Tourism

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The well-being of our shareholders— and a respect for our history in this place—is topmost in mind as we continually enhance our strong financial position.


July 2016 Digital Edition TA BLE OF CONTENTS

DEPARTMENTS

FROM THE EDITOR INSIDE ALASKA BUSINESS RIGHT MOVES ACCOLADES EAT, SHOP, PLAY, STAY EVENTS CALENDAR BUSINESS EVENTS ALASKA TRENDS AD INDEX

ABOUT THE COVER: The cover photo was taken in Denali National Park and Preserve near the Eielson Visitor Center in 2015 during one of Jeff Schultz’s Alaska photo tours and workshops. We selected it for Alaska Business Monthly’s first annual Best of Alaska Business Awards issue because it’s indicative of the top award in each category—the Denali. See the special section beginning on page 43 honoring the Best of Alaska Business. Winners were determined by our readers who responded to a survey conducted earlier this year that we promoted on our website, Facebook page, and in the magazine.

7 111 114 130 132 133 134 135 138

Cover Photo: © 2016 Jeff Schultz / Schultzphoto.com Cover Design: David Geiger, Art Director

ARTICLES TRANSPORTATION

8 | PenAir’s Investments Improve Rural Service

Five Saab 2000 aircraft added to the fleet By Susan Harrington

FINANCIAL SERVICES 14 | Alaska Business Banking Trends

WORKFORCE TRAINING 20 | Alaska Business Week Nurtures Leaders, Entrepreneurs

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Intensive residential camp introduces high school students to business basics By Heather A. Resz

HR MATTERS

40 | The Price of Conflict

Addressing customer needs and preferences By Tracy Barbour

CONSULTANT’S CORNER

18 | Creating a Transferable Business (Part 2) How does my company’s dependence on me impact my transfer options? By Mel B. Bannon

Courtesy of Robert Miller

What you need to know By Kevin M. Dee

ALASKA NATIVE BUSINESS EXPANDED IN DIGITAL EDITION 70 | Native Business Enriches Southeast

Diverse range of economic development By Will Swagel

Lance Mackey wearing Robert Miller’s Sea Fur gloves at the Iditarod.

TELECOM & TECHNOLOGY Special Section

Courtesy of Alaska Marine Exchange

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EXPANDED IN DIGITAL EDITION 22 | Arctic Tracking Technology Mariners gain from Alaskans By Rindi White

28 | Local Alaska IT

Solutions for Alaska businesses of any industry or size By Tasha Anderson

Nick Hatch installing an AIS station for the Alaska Marine Exchange.

30 | See and Be Seen with Patented LEAD-DOG Helmet Light

32 | Advances in Rural Telecom Increasing speed and capacity By Julie Stricker

EXPANDED IN DIGITAL EDITION 36 | Commercial Drones Boost Fairbanks Startups NES and Aquilo on cutting edge of new technology By Julie Stricker

Alaskans develop technology for bright lights By Scott Banks

CORRECTION Due to an email snafu, Northern Air Cargo did not return surveys for the May Oil & Gas Directory or the June Transportation Directory. Here is their listing as it would have appeared in both directories. Company

Top Executive

Northern Air Cargo 3900 Old International Airport Rd. Anchorage, AK 99502 Phone: 907-243-3331 Fax: 907-249-5191

David W. Karp, Pres./CEO

COMPANY

4

TOP EXECUTIVE

customercare@nac.aero nac.aero

FOUNDED/ESTAB. AK

1956 1956

WORLDWIDE\AK EMPLOYEES

351 345

Services

SERVICES

Anchorage based Northern Air Cargo is AlaskaÕs largest all-cargo airline. From groceries and generators to medical supplies and lumber, customers across Alaska, including a wide array of industries such as oil & gas, mining, construction, and commercial fishing rely on NACÕs services.

Alaska Business Monthly | July 2016www.akbizmag.com


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July 2016 Digital Edition TA BLE OF CONTENTS

BEST OF ALASKA BUSINESS Special Section

INSURANCE

106 | Alaska’s New Workers’ Compensation Fee Schedule Having a positive impact on medical costs and premiums By Tracy Barbour

HEALTHCARE

110 | The American Heart Association in Alaska

Healthy living and healthy hearts in the Last Frontier By American Heart Association, Alaska Division

43 | Best Alaska Job Opportunities for College Graduates 44 | Best New Alaska Startup 46 | Best Town in Alaska to Grow a Business 48 | Best Business Breakfast 49 | Best Business Lunch

OIL & GAS

50 | Best Coffee Shop for Business Meetings 52 | Best Restaurant for Business Dinner 53 | Best Business Take-Out Food

54 | Best Catering 56 | Best Alaska Business App 57 | Best Angel Investor 58 | Best PR Event For Charity 60 | Best New Alaska Business Trends 61 | Best Brewery in Alaska 62 | Best Distillery in Alaska 65 | Best Place to Work

Photo courtesy of Global Diving & Salvage

BUILDING ALASKA Special Section

113 Monopod Platform Installation in 2015, Furie Kitchen Lights Platform during the installation before the top package was installed.

EXPANDED IN DIGITAL EDITION 113 | Oil & Gas Underwater Support Services

Productive, efficient, and safe in Alaska’s challenging waters By Tasha Anderson

122 | ConocoPhillips Alaska Won’t Export LNG This Year License for international exports extended to February 2018 By Heather A. Resz

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90 EXPANDED IN DIGITAL EDITION 76 | Construction Roundup: Summer 2016 Compiled by Susan Harrington

EXPANDED IN DIGITAL EDITION 88 | Z.J. Loussac Library Renovation Expanding functionality for the Anchorage community By Tasha Anderson

94 | Construction in Interior Alaska ‘Kind of a slow start’ By Julie Stricker

98 | Retail Development in the Valley

Signs of growth in Palmer, Wasilla, and Big Lake By Rindi White

The project team and stakeholders officially break ground on the new Denali OB-GYN Clinic at the Alaska Pacific Medical Center in the Anchorage U-Med District April 26.

100 | Upscale Downsizing in the Real Estate Market

Retirees opting for smaller luxury homes By Kailee Wallis

102 | Construction Begins on APU Endowment Lands

First building under new development agreement By Heather A. Resz

104 | Measure of Safety Performance By Brian McKay

Alaska Business Monthly | July 2016www.akbizmag.com

Photo by Wayde Carroll for Southcentral Foundation and Pfeffer Development

ARTICLES


FROM THE EDITOR VOLUME 32, NUMBER 7 Published by Alaska Business Publishing Co. Anchorage, Alaska

Alaska Business Monthly’s

EDITORIAL STAFF

Managing Editor Susan Harrington 257-2907 editor@akbizmag.com Associate Editor Tasha Anderson 257-2902 surveys@akbizmag.com Art Director David Geiger 257-2916 design@akbizmag.com Art Production Linda Shogren 257-2912 production@akbizmag.com Photo Contributor Judy Patrick

BUSINESS STAFF

President Billie Martin VP & General Manager Jason Martin 257-2905 jason@akbizmag.com VP Sales & Marketing Charles Bell 257-2909 cbell@akbizmag.com Senior Account Mgr. Bill Morris 257-2911 b_morris@akbizmag.com Account Mgr. Janis J. Plume 257-2917 janis@akbizmag.com Accountant Ana Lavagnino 257-2901 accounts@akbizmag.com Customer Service Representative Emily Olsen 257-2914 emily@akbizmag.com 501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 | Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com | Editorial email: editor@akbizmag.com

ALASKA BUSINESS PUBLISHING CO., INC.

ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2016, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/Digital-Archives, www.thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

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DENALI ST. ELIAS FORAKER

T

hank you to our readers who helped us select the winners of Alaska Business Monthly’s first annual Best of Alaska Business Awards, which we are revealing in a special section that begins on page 39. The success of all the winners and their exceptional dedication to Alaska business holds great promise for Alaska’s future and the economy. Through the challenges of getting something new, such as this special section, off the ground, I offer heartfelt gratitude for all the material everyone contributed. We received truly inspiring comments and phenomenal artwork. Congratulations to all the recipients of the Denali, St. Elias, and Foraker awards in Alaska Business Monthly’s first annual Best of Alaska Business Awards! Kudos to those winning an award in more than one category: Bristol Bay Native Corporation and its Bristol Bay Development Fund, the Municipality of Anchorage and its 49th State Angel Fund, Glacier Brewhouse, Odd Man Rush Brewing, Peppercini’s Deli & Catering, and Simon & Seaforts. You’ll have to read the magazine to find all the categories and winners, plus almost two dozen great articles and our monthly fixtures. Be sure to look for two additional special sections: Telecom & Tech and Building Alaska. The team has put together another really great magazine—enjoy!

twitter.com/AKBusinessMonth Susan Harrington Managing Editor www.akbizmag.com

July 2016 | Alaska Business Monthly

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TRANSPORTATION

Photo courtesy of PenAir

Unalaska Mayor Shirley Marquardt cuts the ribbon to PenAir’s SAAB 2000 at the Tom Madsen Airport on Amaknak Island at Dutch Harbor to welcome the community onboard to check out the new plane. From left, PenAir President Scott Bloomquist, Marquardt, PenAir CEO Danny Seybert, and guest Pat Geitz.

PenAir’s Investments Improve Rural Service Five Saab 2000 aircraft added to the fleet By Susan Harrington

A

viation in Alaska just got better. The family-owned airline PenAir, in business for more than sixty years, has invested millions in several bigger, faster aircraft to expedite and increase passenger and freight loads to Unalaska and Dutch Harbor as well as the Pribilof Islands and Bristol Bay. The airline Orin Seybert founded with a two-seater aircraft in 1955 has remained a family-owned business and is the oldest family-owned continuously operating airline in the United 8

States. It has withstood a lot of changes in the industry and the state economic climate. PenAir is legendary in the Alaska aviation industry and throughout the United States. The company continues to thrive and there is excitement about the latest endeavor. PenAir has been flying to Dutch Harbor since contracting the route from Alaska Airlines in 2012 as a CPA (capacity purchase agreement) partner with PenAir operating the flights and Alaska Air taking reserva-

tions. Danny Seybert, CEO of PenAir, says his business is “holding steady in Alaska” and he has recently invested in aircraft to improve rural service. “I’m bringing five Saab 2000’s on board and we are making about a $27 million investment in these airplanes. They are going to replace the majority of my fleet here in the state of Alaska.” The aircraft are arriving in stages: three are in state now, two are being outfitted in Missouri. One is being customized for flights to

Alaska Business Monthly | July 2016www.akbizmag.com


Landye_Hume_AKBusMon_2013_Layout 1 12/20/12 10:50 AM Page 1

St. Paul and St. George. It will have thirty seats and two cabins, one aft for life rafts and one forward for bypass mail, and then it can be flown over water to the Pribilof Islands. Another is getting outfitted with high tech upgrades including a satellite phone, instant real time weather, satellite data, and other safety features and efficiencies the first three were outfitted for before they were brought up a few months ago. What led to the big investment decision? “High fuel prices,” Seybert says. “What started in 2008. We needed to become more efficient in our operation and the way we could do that was get bigger airplanes that go faster and haul more people more efficiently.” PenAir is now flying more people on fewer flights with the Saab 2000 than on the Saab 340. Seybert says, “In Dutch Harbor last year we flew 1,600 flights. This next year I anticipate putting the same number of seats in the market with 900 flights.” All those fewer flights pencil out. The Saab 2000 uses less fuel per passenger when allocated on a per passenger basis, so it is more energy efficient, plus it’s faster—100 knots faster. Those fifty-five thousand people flying to Dutch Harbor every year will gain time; instead of flying three or four hours, Seybert says, “with the new aircraft we’ll do it in two hours and be able to go nonstop without stopping for fuel—huge improvement.” The Saab 2000 has other advantages as well. It is a smooth, quiet ride, with lots of legroom. The larger, slower propellers vibrate less and contribute to the smoothness of the ride, even in turbulence. During the flight, the noise canceling system makes it possible to carry on a conversation with traveling companions or take a quick nap while relaxing with stretched out legs. Seats have a thirty-four inch pitch— same as first class in narrow body aircraft. It’s nice for all the passengers who depend on PenAir for transportation through all the seasons.

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Seasonal Business

A lot of companies have seasonal business, so does PenAir. “We have crab season, cod season, halibut season, salmon season, rockfish season,” Seybert says, naming more ocean dwellers. “Our business is not affected by today’s recent economic problem with the state of Alaska,” he explains. “Depending on what they do with the budget it may very well be impacted by what they do in the future. As of today, the seafood industry is very healthy, and we have a very good marketing presence with the seafood industry.” Seybert continuously meets rural Alaska aviation needs by providing transportation services where they’re most needed. “Depending on the season—in June and July Bristol Bay is our biggest market, in Januwww.akbizmag.com

July 2016 | Alaska Business Monthly

9


One of PenAir’s SAAB 2000 aircraft sitting on the tarmac at Ted Stevens Anchorage International Airport ready for a flight to Dutch Harbor. Photo courtesy of PenAir

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Alaska Business Monthly | July 2016www.akbizmag.com


Pavlof Volcano could be seen emitting steam on the return flight to Anchorage from PenAir’s SAAB 2000 inaugural flight to Dutch Harbor, May 6. Pavlof began erupting March 27 and again May 14.

ary Dutch Harbor is our biggest market, and then various communities depending on the fishing season. We’ll have a big spike for St. Paul, we’ll have a big spike for Cold Bay and Sand Point—we also do crab, halibut, and salmon openings.” PenAir also delivers bypass mail to the communities they fly to in Bristol Bay and Western Alaska: King Salmon, Dillingham, St. George, St. Paul, Aniak, McGrath, and Unalakleet. They’ve been bidding on and winning Essential Air Service contracts in the Lower 48; they fly on the West Coast, the East Coast, and most recently were awarded some rural communities in the Midwest that will be routed out of Denver. Some of the Saab 340 aircraft that used to fly to Dutch Harbor will be going south.

Photo by Susan Harrington for Alaska Business Monthly

Leadership

The business is doing well, and has for a very long time. That is no easy feat. There are reasons for PenAir’s long-term success. “Well, first of all we have really good employees. We have many, many long-term employees that have been with us twenty, thirty, forty years, and they’re willing to step up and do what’s necessary to stay successful,” Seybert says. “And the other thing is we’re not afraid to change our business model when it’s not working as we desire or if we see opportunities to do something better we are very willing to change our company. I think that another big factor about why we’re successful is we’re not afraid to change.” The consistent, dedicated leadership through two generations of Seyberts is another factor. Great customer loyalty and great customer service are two more factors. “After sixty-one years my dad’s still involved. Also, we’re an Alaska Native owned company—we’re Alaska Natives,” Seybert says. “The consistency of providing a service to the region that is needed, such as supporting the people that live these communities. They can’t live or work in these communities without our support and we understand that. The businesses that run in these communities, such as the seafood industry and the businesses in tourism, they also couldn’t do their jobs if they didn’t have a good partner in us as their airline. So we’ve maintained those relationships for many, many years. Some of our customers go back to when my dad first started. Two of the seafood customers that were some of his original customers—Trident and Peter Pan Seafood—are still our customers sixty years later.”

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Improvements

The company is also diversified. Seybert explains: “We have really four distinct portions of our business. One is the bypass mail, which is about 10 percent. The second www.akbizmag.com

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July 2016 | Alaska Business Monthly

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Photo courtesy of PenAir

PenAir CEO Danny Seybert welcomes a family boarding the first SAAB 2000 scheduled passenger flight to Dutch Harbor. May 7.

component is the people that live and work in the region. Third is the seafood industry, and the fourth is our cargo business. Among those four components, that’s what we do.” And they are always improving something, whether it is the fleet, the facilities, or the operations. PenAir recently remodeled the terminal in King Salmon, preserving part of the old terminal as a visitor center. There is a culture of safety throughout the company. Per the codeshare regulation, they’re required to maintain the same level of safety as their codeshare partners, and they are subjected annually to safety audits by Alaska Airlines to verify that they follow all the regulations and that they incorporate industry best practices, which they do on a monthly basis. If they can find a way to do anything better, safer, more efficient, they do it. For example, the recent introduction of iPads in the cockpits. Electronic flight bags are an improvement over traditional flight bags, which are the box kits that airline pilots roll behind them in airports; now all those navigation charts, books, manuals, maps, and calculators pilots need to do their job are conveniently accessed digitally on an Apple iPad and synced daily for updates. Less paper is used and more information is available to 12

the flight crew. The iPad flight bag is about forty-eight pounds lighter, too. “Another suitcase you can carry,” Seybert says.

Focus on the Future

Seybert is also focusing on the future of the family business. His dad founded the business, several nephews and nieces and a daughter work for him, and his brother Lloyd is a pilot and director of operations. The company motto, “Spirit of Alaska,” signifies the spirit of helping others and cooperation. “The family culture that we operate under and the spirit of taking care of these communities and the people that fly with us. We are very much aware of the fact that we need to take care of them,” Seybert says. The people in those communities are grateful to PenAir and excited about the Saab 2000. May 6 was historic for PenAir. The private inaugural flight from Anchorage landed first in King Salmon and then Dillingham to board Alaska Native leaders and other passengers for the journey to Dutch Harbor. It was an idyllic flight gliding above the Naknek River—flocks of swans and an abundance of other birds could be seen below, where the tundra looked parched and the river looked low. The flight

continued across Kvichak Bay and over the Wood River to Dillingham. When the flight landed at Dutch Harbor, Unalaska Mayor Shirley Marquardt and a couple hundred people turned out to welcome the passengers and celebrate the arrival of the Saab 2000. There was a community wide open house with a ribbon cutting and tours of the plane; the terminal was full of people for hours, with speeches, great food, and a lot of happy people excited about future flights on the new aircraft. Seybert’s plans for PenAir’s future? “Well, we plan on giving better service to our communities in Alaska with the use of a bigger, faster airplane. We expect better baggage handling, with more efficient flying, so we are enhancing our Alaska operation as well. We pretty much stick to our traditional route structure that was formed many years ago, which is serving Bristol Bay and the Aleutians and three cities in Western Alaska. Focusing on the longevity of the family—we are going to continue the family tradition and be in the airline business for a long time to come.” R Susan Harrington is Alaska Business Monthly’s Managing Editor.

Alaska Business Monthly | July 2016www.akbizmag.com


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FINANCIAL SERVICES

Alaska Business Banking Trends Addressing customer needs and preferences

The Denali Business Center. Courtesy of Denali FCU

By Tracy Barbour

R

ecently, Denali Federal Credit Union began offering customers a special perk: the Denali Business Center. Business members can use the Midtown Anchorage facility to host meetings, conferences, and other events in a professional setting. They can take advantage of the center’s private offices, small meeting rooms, stateof-the-art video conferencing, and copy and fax equipment. There’s also a resident concierge available to help with everything from room reservations to refreshments. The Denali Business Center is a valuable and much-needed resource in the community, particularly for small business owners, says Tara Tetzlaff, senior vice president, Business Lending And Services. The center is also a positive selling point for the Credit Union. “It is an excellent way to differentiate ourselves from the competition and to serve business owners who don’t have the resources,” Tetzlaff says. “It’s high-tech, and they like it.” Denali’s business customers can use the center’s amenities for $25 per day or $300 per year. However, the credit union may be able to waive the annual fee for certain members. “It depends on the relationship,” Tetzlaff says. The Denali Business Center is an example of how Alaska’s financial institutions are enhancing their products and services to meet the needs of business customers. Other business banking trends in Alaska range from increased interest in offerings from credit unions to a greater demand for technology, fraud protection, time-saving services, and small business solutions.

Credit Unions Catering to More Businesses Today, credit unions are more focused on offering business banking services than they have been in the past, according to the National Credit Union Administration. Credit unions have found a niche supporting small businesses that may be neglected by other, larger institutions, Tetzlaff says. This is enabling them to expand their 14

membership and better serve their existing customers. “For years, our consumer members who also owned businesses have requested services,” she says. “By developing products to serve the needs of these members, we can provide the personal service and individualized products that retain their personal and business relationships.” More business owners are looking toward credit unions to fulfill their commercial banking needs, Tetzlaff says. And Denali FCU is striving to meet their expectations. For instance, the credit union offers automated clearing house (ACH) service that enables customers to pay bills, withdraw payments, and direct deposit payroll conveniently online. They can also use remote deposit capture to deposit up to 150 check items in one scan without leaving their office, paying a courier service, or mailing the items. Beyond its deposit products, Denali offers an array of business lending products to meet customers’ needs. Recently, the credit union began issuing business Visa cards that offer the ability to establish cardholder limits and even control what items can be purchased. In its efforts to cater to businesses, Denali allows business members to establish accounts according to their preference. Members can set up sub accounts as well as establish multiple accounts with unique numbers for different purposes. “Denali is flexible and can support a variety of needs,” Tetzlaff says. “Our Business Financial Services team will take time to get to know our members and offer the mix of products that best fits their business operations.”

The increased presence of credit unions in commercial banking is a positive trend for the business community, according to Dave Hamilton, executive director of Business and Commercial Services at Alaska USA Federal Credit Union. Alaska USA— which has offered business loans since 2004—has steadily been increasing its offerings for business members. “Business owners are used to competing for their share of the market they work in, so they appreciate having more financial institutions competing for their business,” Hamilton says. “We’ve heard from long-time members and new members alike that they appreciate being able to conduct their business services at the same place they manage their personal finances.” Hamilton says business owners are looking for ways to streamline their banking services through automation to reduce the administrative time. That’s why Alaska USA is excited to offer remote deposit to business members. The service allows business checks to be deposited via a smart phone app, letting users avoid making deposits in person. Alaska USA also offers a variety of online financial management tools that can help business owners have more time to concentrate on their business revenue activities.

Key Trends Involving Technology

Many of Alaska’s business banking trends are being driven by the use of technology. Because of technology, businesses expect customized banking services, according to KeyBank Vice President and Commercial

Alaska Business Monthly | July 2016www.akbizmag.com


Banking Relationship Manager Phil Reid. “It’s no longer the one-size-fits-all type of environment,” says Anchorage-based Reid. For example, if a business wants to require triple authority for approving a transaction, modern technology makes this possible. The older banking systems only allowed for dual authority. “But now software is adaptable to meet whatever standards the company wants to have,” Reid says. KeyBank’s recent partnership with Charlotte-based AvidXchange is one example of how software is being adapted to the needs of users. The bank hired AvidXchange to customize its cutting-edge software for its accounts payable system. The software takes paper-based invoices and seamlessly converts them to a digital format. “It speeds up processing time,” Reid says. “It allows office staff to spend time on other projects like growing their business.” Business banking customers are also using mobile technology to facilitate banking activities. They’re using mobile devices to do everything from approve ACH and account transactions to monitor their accounts for fraud when they are away from the office. Reid says he feels that technology has become a great equalizer. And in Alaska, it’s a real game changer. Technology is allowing businesses in Alaska to function like other companies in any other part of the country. “It’s very gratifying that we have the same services as anyone else,” he says. There’s a demand for better and better business banking products in the state, and KeyBank is striving to satisfy those needs, Reid says. “Keybank is constantly working on research and development to provide clients what they want,” he adds. At Wells Fargo, technology is quietly transforming customer interactions. Customers are less likely to walk in the door to do transactional business, says Wells Fargo Alaska Small Business Segment Manager Andrew Foust. When customers do visit a bank, it’s typically to speak with someone about a complex issue. Still, technology can have the underlying effect of facilitating conversations. “When there is a need—if we’re doing our job and engaging customers proactively—technology helps us do our jobs better,” Foust says. Even though many customers may use technology to become well versed on banking options, having a face-to-face relationship is still crucial, Foust says. However, using technology to explore options can speed up and enhance the decision making process for customers. “It almost makes the customer feel better about their decision if they’re already done their research,” Foust says. Today, millennials make up a growing segment of business owners, and technolwww.akbizmag.com

ogy is a staple tool for these younger business customers. They tend to want to have their bank in their pocket, Foust says. “Contrary to popular believe, millennials do want a banking relationship, but they want it when they want it,” he says. To satisfy customer demand, Wells Fargo is seamlessly integrating all the delivery channels that customers are using, Foust says. For example, it’s using technology to provide options like smartphone alerts and notifications to help customers stay on top of their account information. Mobile banking is also becoming more prevalent in business banking. In fact, more

than 51 percent of business owners said they use a mobile device to conduct banking related to their business, according to Wells Fargo’s latest quarterly Gallup Small Business Index on technology and payment trends. The mobile banking activities that respondents use most often on their smartphone or tablet were staying on top of cash flow for their business (38 percent), mobile deposits (21 percent), paying bills (13 percent), transferring funds (12 percent), and monitoring for out-of-pattern transactions or fraud (12 percent). Like Wells Fargo, Northrim Bank is focusing on making it easier for business customers to access their account with mobile de-

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July 2016 | Alaska Business Monthly

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vices, according to Senior Vice President and Electronic Channel Delivery Manager Katie Bates. In the past, businesses were driven by desktop computer, but now mobile devices are the norm. “They’re used to utilizing their devices for other things, so they also want to use them for banking,” Bates says. Consequently, Northrim is carefully considering how to present its service offerings to best fit customers’ habits. The bank is exploring how to better optimize its website to enhance the customers’ online and mobile banking experience. Thanks to technology, electronic delivery is a dominant trend in business banking. In the past, Bates says, business owners wanted to perform their banking from 8 to 5, and now that business products are being offered electronically, this has changed. “It’s forcing us to make our products and services available when customers want them,” she says. Taka Tsukada of First National Bank Alaska is seeing a consistent shift away from paper to electronic and mobile banking. That makes sense, given the convenience of online banking and Alaska’s vast geographical size, says Tsukada, vice president, Cash Management and Anchorage Branch Administration manager. First National is excited about launching an upgrade of its existing online banking sys-

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tem, ONEPay. The revamped system is a nextgeneration payment tool that gives business customers the convenience of handling ACH and wire transactions in a more intuitive manner, Tsukada says. “In working with our customers, one of the key trends we’re seeing is that not only are customers looking for efficiencies with processes and transactions, but they want to have an intuitive interface in order to do that,” Tsukada says. First National is also responding to customers’ request for future-dated wires or transactions. Now customers have the ability to input transactions forty-five days in advance. “It allows them to bank when they want to bank, instead of always having to input a transaction in a shorter amount of time,” Tsukada says.

Fraud Protection and Security

One of the key areas trending in business banking is customers’ concerns related to fraudulent transactions. Through its ONEPay product, First National has included additional enhancements related to security. For example, customers are asked to provide identification when signing in and approving transactions. “This gives the customer peace of mind,” Tsukada says. To help customers streamline processes, ONEPay automates notices for fund trans-

fers, payments, and other transactions. So instead of having to go look for this type of information, customers receive statuses by email. Tsukada says, “It’s really about improving the user experience.” Tsukada says fraud has always existed, but now it’s become more well-documented. More and more, customers are becoming aware of the need to take steps to try to mitigate fraud. And they are interested in services that will help them protect themselves. First National’s Positive Pay cash management option can help address this concern. Positive Pay is a relatively simple tool that effectively thwarts fraud. “The customers provide us with the equivalent to their check book register, and we compared their file to what is trying to clear the bank,” Tsukada explains. “If a check or an amount doesn’t match, we would be able to identify that and let them know.” As the technology changes to offer better protection against fraud, companies have to change how they view their current business model and practices, Foust says. Indeed, practices are changing. Some businesses are adding extra purchasing protection on their commercial credit cards with MasterCard SecureCode and Verified by Visa from Wells Fargo. Once they enroll in MasterCard SecureCode or Verified by Visa, customers have a

Alaska Business Monthly | July 2016www.akbizmag.com


single password to use when they make purchases at participating online stores. As credit card fraud becomes harder to commit, criminals look for other ways to attack, Foust says. “We’re starting to see interest in businesses wanting to protect themselves from check fraud or ACH fraud,” he says. As a result, businesses are turning to services like Wells Fargo’s ACH Fraud Filter and Perfect Receivables. ACH Fraud Filter uses a two-pronged “stop” and “review” approach to prevent fraud. The free service automatically stops all ACH debits that are not preauthorized from posting to the customer’s account. Then it presents transactions for review, so the customer can make pay or return decisions. Wells Fargo’s Perfect Receivables service provides “proxy” account numbers for customers to use when submitting ACH and wire payments. This minimizes the risk that the business owner’s account will fall into the wrong hands. Business owners like the fact that they can manage their business accounts through electronic channels, Hamilton says. However, there is always concern about security when using these channels. That’s why Alaska USA continues to implement security features within its online systems to help prevent fraud. For example, businesses can establish limits and authorize personnel to conduct transactions in a safe and secure manner. “We see more and more business owners becoming comfortable with these features, and it allows them the ability to approve all transactions before being processed,” says Hamilton. Addressing security concerns is also paramount at Denali FCU. The credit union’s online platform not only offers a robust and positive experience for users, but it also includes a variety of security features like Touch ID, according to Tetzlaff. Customers with Apple devices can use Touch ID to access their account with just their fingerprint. Reid says businesses are looking for banks to provide ways to minimize the danger of internal and external fraud. To minimize risk, KeyBank spends a great deal of time and resources strengthening the security of its online banking software. The bank also offers webinars to educate customers on how to best protect themselves from fraud.

Small Businesses Trends

Alaska’s financial institutions are also launching new products and services to address the needs of small businesses. Northrim, for instance, is in the process of releasing a new bill pay product that will allow business customers to pay bills and www.akbizmag.com

have invoice capabilities. “It’s taking a look at our business customers’ needs and recognizing that our smaller customers may not want ACH,” Bates says. “They may be more inclined to use bill pay.” The bill pay product, aptly named Business Bill Pay, is the result of customer interest and feedback. It should be fully implemented by the end of July. Bates says it’s important that small businesses are using product offerings that best meet their needs. Consequently, Northrim is initiating courses to help businesses learn more about their banking services. “We want to make sure that when our customers sign up for electronic services, they know how to access the resources,” she says. “They also need to know what’s available, why it’s available, and how they can utilize it to their full potential.” In addition, Northrim wants its customers to have best practices, so they can learn from others and improve their efficiency. Take ACH service, for example. A customer using ACH for direct deposit might be able to capitalize on automation to avoid typing in the dollar amounts. “If their software can generate an ACH file, they can save all that time from manually keying by utilizing something that’s already available,” Bates says. Small businesses that need financing may be able to take advantage of the Small Business Advantage Line of Credit from Wells Fargo. The Small Business Advantage Line of Credit is a revolving line of credit for $5,000 to $50,000 with a five-year term. Backed by the Small Business Administration, the line is completely unsecured, and no collateral is required. “It’s something that’s new and exciting for us,” Foust says. “It’s underwritten largely under their personal credit.” The Small Business Advantage Line of Credit allows Wells Fargo to provide a Small Business Administration product at a much faster speed to market. “We’ve got it [processing] down to 17.5 days,” Foust says. “Customers who have their documentation in order can expect an even faster turnaround.” But perhaps the most exciting aspect of the new credit line is this: Wells Fargo can offer it to new customers. The zeroto-three-year mark has historically been a challenging time for new businesses that are applying for credit, Foust says. Wells Fargo’s product can make it easier for them to secure financing. “Even though it’s a small line, it’s establishing a history,” he says. “It’s something for new businesses— not just a credit card.” R Freelance writer Tracy Barbour is a former Alaskan. July 2016 | Alaska Business Monthly

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CONSULTANT’S CORNER

Creating a Transferable Business (Part 2) How does my company’s dependence on me impact my transfer options? By Mel B. Bannon

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any owners today are becoming aware that a process exists to help them plan for the exit from their privately-held business. Some of these owners are also beginning to see that the greater amount of dependence that their company has on their individual efforts, the harder it will be to transition to a new owner. This article is written to assist owners with the understanding how their options for an eventual exit can be impacted by how dependent their business is on them. In addition, we will explore a new tool business owners can use to assist them in taking an initial measurement of their own dependence level (Owner Dependence Index).

A Company’s Dependence on Its Owner Will Impact Exit Options Business exit and transfer planning includes identifying what an owner wants most—at both a personal and a company level—and combining that with how well prepared they are to execute on a transition. For example, an owner may want to transfer their business to an outside buyer. However, if the business is too dependent on the owner, there is a risk that the business will not survive in the hands of another owner. In this case, the exit option of an external transfer may be limited. In turn, that may limit the owner’s overall ability to transition the company to someone else and ultimately reach their exit planning goals. Different Exit Options

In the world of private business transfers there are five primary ways that a business 18

can transition to a new owner. The first two options are external buyers (which include competitors) and investment groups that can purchase the business. By contrast, insiders include co-owners, managers, and family members. Internal transfers can consist of a management buyout, an employee stock ownership plan, and/or gifting to others, such as family members or charitable entities. The amount of dependency that a business has on an owner can impact these various exit options in different ways, some good and some bad.

Sales to Private Equity Groups

Private equity groups don’t mind high owner dependency too much, provided that the owner is agreeing to work for these investors after the transaction. If the owner dependency level is high, then both parties need to give serious consideration as to how their relationship will be affected after the transaction. They will need to consider that this relationship could exist for a very long time. By reducing owner dependency and by empowering a management team, that owner should be able to attract more investors because they have demonstrated scale in their business. This would clearly be advantageous to the owner in as much as the transaction price could be maximized.

Sales to Outsiders/Competitors

Let’s begin with a sale to a competitor. If the company has a high dependency on the owner, a competitor is unlikely to pay the full value at the closing. Rather, that buyer will often look to structure a transaction with

deferred payments, such as notes and earnouts, at least until a point in time when the buyer is comfortable that the company can survive without that owner. Moreover, with these transactions owners are often asked to stay on board long enough to make a neat and orderly transition. If this is the case and there is a high level of owner dependency, a separate issue could then arise—the fact that most owners do not make good employees. If the buyer and seller are both unhappy after the transaction, but the company needs the owner to continue to run efficiently and effectively, a very unhealthy relationship could develop, putting the company and transaction at risk.

Sales to Insiders/ Management Teams A sale to a management team can be an attractive option for many owners. However, the highest downside to this form of transaction is that the payments from the management team will most likely be drawn from the future continued success of the business. Therefore, if a high level of owner dependence exists, what that owner may discover is that the company cannot run without him and, in turn, won’t be able to make the purchase payments without his active involvement. Thus, many owners may simply conclude that if they are continuing to work in the business, perhaps they should just hold onto it. The logical conclusion is that no transaction or exit happens. Therefore, reducing owner dependence for an internal transfer can help increase the likelihood of success.

Alaska Business Monthly | July 2016www.akbizmag.com


Measuring and Managing Owner Dependence The Owner Dependence Index is a free online survey tool that allows owners of privately-held businesses to measure the amount of dependence that their business has on their individual efforts. Owners take a confidential forty question survey assessment and get a score from 1 percent to 100 percent that lets that the owner know how dependent their business is on their individual efforts. The Owner Dependence Index was created to help owners take this measurement and then work, over time, in a focused manner to reduce the amount of dependence their company has on them. By completing this online survey tool, business owners can take the first step in knowing their Owner Dependence Score and begin the process of better understanding how that score will impact the their options for a future successful exit. There is no fee involved with taking the survey and a personal customized report is immediately emailed in complete confidence. As a business owner who may be thinking through the eventual exit from their business, this online assessment may be the ideal starting point in building an exit plan that achieves all personal and business transfer objectives. R

Mel B. Bannon, CLU, ChFC, RFC is a registered representative of Lincoln Financial Advisors, a broker/dealer, member SIPC, and offers investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, 31111 Agoura Rd., Ste. 200, Westlake Village, CA 91361 (818) 540-6967 or 1500 W. 33rd Avenue, Ste. 210, Anchorage, AK 99503 (907) 522-1194. Insurance offered through Lincoln affiliates and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances. Exit Planning offered through unaffiliated third parties. CA Insurance License #0412338, AK Insurance License #19665 CRN-1464738-040616 www.akbizmag.com

July 2016 | Alaska Business Monthly

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WORKFORCE TRAINING

Alaska Business Week Nurtures Leaders, Entrepreneurs Intensive residential camp introduces high school students to business basics By Heather A. Resz

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ometimes a yard sale is just a yard sale and sometimes it launches a new business. The latter is true for Bethel’s Kate McWilliams. She was still a student at Bethel High School when a family garage sale in 2014 sparked the idea to open a consignment business, called Arctic Belle Boutique. While organizing clothing displays for her family’s yard sale, she said she realized there was an opportunity to create a clothing exchange system in the Yukon Kuskokwim Delta. With a $3,000 grant from a local entrepreneurship competition called “Best in the West,” she began collecting inventory and cleaning and renovating her stepdad’s wood shop in preparation to open her shop that fall. “When word spread that I would be taking used clothing, bags started showing up at our doorstep,” McWilliams says. Serendipity led her to Alaska Business Week while she was attending another program at the University of Alaska Fairbanks in summer 2014, she says. Since she planned to open her store in November 2014, McWilliams says she thought the program would be a good way to learn more about the business world in general. “It helped me gain the confidence to start up my boutique,” McWilliams says, now a freshman at Pomona College in Southern California. “I would definitely recommend this program to anyone with an interest in business.” While she is away at college, some friends from high school work with her to open the consignment shop on weekend afternoons. “At times, it is difficult managing the store from thousands of miles away,” McWilliams says. “I realized that because I love my business so much, I’m willing to put in all my extra time and effort. But I can’t expect that from paid employees.” She says she’s been surprised by the community’s support for her business, even in her absence. “I still have loyal customers and good business,” she says. “It has been a huge success so far.” 20

From the river to the runway, Arctic Belle Boutique helps re-home clean, lightly-worn, in-season women’s clothing, footwear, jewelry, bags, hats, mittens, scarves, and hair accessories. And the boutique also sells handicraft items, some made by local artists and some from as far away as Sweden, McWilliams says. “The boutique has created a unique community and serves a niche in Bethel that didn’t exist before,” she says.

Tools to Succeed

Since the Alaska Chamber of Commerce launched Alaska Business Week in 2010, 320 high school students have completed the week-long introduction to the basics of business, leadership, and entrepreneurship. Program Director Nicole Schuh says the program established a separate 501(c)3 in 2015 to simplify the donation process, but remains a Chamber program. During the annual residential camp— July 16 to 23 this year—students make new friends from across Alaska while earning one college credit for completing an intensive business program on the campus at Alaska Pacific University in Anchorage. “I remember the schedule being really packed—I was exhausted by the end—but it really pushed me intellectually,” McWilliams says. “There was a lot of teamwork involved within ‘companies,’ and we learned how to brainstorm and build on each others’ ideas.” Schuh says campers are organized into “companies” with each group assigned a Company Advisory. Companies then work together throughout the week on a college level business simulation and to create a product or service. Teams compete in the business simulation against each other to see which company performs the best through eight quarters of business. Both projects come together at the end of the week when students present their business simulation results to a panel of judges acting as stockholders. The program then holds a tradeshow where judges act as investors and

For more information about Alaska Business Week, or to enroll for 2017, visit alaskachamber.com/ABW. companies try to get them to invest in the product they have created during the week. Schuh says business week ultimately gives students a competitive edge on workplace readiness, college preparation, and overall life success. “[Alaska Business Week] gives participants the tools they will need to succeed after their high school graduation,” she says. For McWilliams and other students, the opportunity nurtures existing entrepreneurial seeds, Schuh says. For others, it plants the seeds. Already the program counts McWilliams and several other business owners and community leaders among its alumni, she says. McWilliams says the support and advice her mentor at camp gave her about her business idea encouraged her to move ahead with her plan. “That kind of positive encouragement really helped because I wasn’t sure if I was getting into something way over my head.”

Thanks to Business Support

Alaska’s Business Week Program is modeled after the Foundation for Private Enterprise Education’s Washington Business Week. Since it was founded in 1976 the program has helped launch similar camps in Alaska, Colorado, Iowa, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, and Wisconsin. Alaska State Chamber of Commerce presented the idea to members at a meeting in May 2009 and launched the first Alaska Business Week in 2010 at the University of Alaska Fairbanks, before relocating in 2015 to Alaska Pacific University. About a third of the camp’s sixty-five students come from communities outside Alaska’s Railbelt region each year. “The goal is for every interested Alaskan student to attend,” Schuh says. Alaskan high school students finishing grades 9-12 in May 2017 should plan to attend the 2017 camp, she says. Annually, business sponsors like Alaska Railroad, Alaska Airlines, and Ravn Alaska

Alaska Business Monthly | July 2016www.akbizmag.com


help defray travel expenses. Underwriters including BP, ConocoPhillips, Tesoro, Alaska Credit Union League, Saltchuk, Alaska Communications, First Choice Health, Northrim Bank, NANA Development Corporation, Alaska Railroad, Ravn Alaska, TOTE Maritime, Premera Blue Cross Blue Shield of Alaska, Watterson Construction, Lynden, Design Alaska, Hecla Greens Creek, Alyeska Pipeline, Bristol Bay Native Corporation, and Samson Tug and Barge help defray the program’s $2,000 per student cost. Thanks to business support, Schuh says, students pay $475, including room and board for the week, materials, and college credit. Dozens of additional businesses in communities around the state also support individual student’s efforts to attend Alaska Business Week, Schuh says.

“It is really easy to forget what it’s like not to know things, like what is business? How do organizations make money? How do you grow knowledge in other people?” he says. Some students arrive with business plans in hand, others arrive somewhat reluctantly at the urging of their parents or academic counselors, he says. It’s exciting to see a light bulb go on in kids who hadn’t imagined business week had anything to offer them, Knechtel says. “Business transcends every career,” he says. The camp also is a good personal reminder for him about the process of growing leaders and increasing the capabilities of a team and an opportunity to hone his skills as an instructor and teacher of people, Knechtel says. “If you really want to learn something, teach it.”

‘Business transcends every career’ A co-worker got Sandy Knechtel volunteering with Alaska Business Week three years ago. It was a natural fit, since it combines his three passions—Alaska, education, and business. Alaska Business Week wouldn’t be possible without the financial support of Alaska businesses and volunteers like Knechtel who uses vacation time to be part of the camp each year.

More Job Creators than Job Seekers Alaska Business Week Board member Andy Rogers has a passion to teach business principles to young people. “I want to teach as many kids as possible what it means to be in business: to be ethical, honest, contributing members of society—and to teach them that they can do that here in Alaska,” he says. Rogers said Alaska Business Week is a

tool Alaska business leaders can use to teach business acumen to a new generation of future Alaskan innovators and job creators. He wants to build a future in Alaska where there are more job creators than job seekers, he says. “I want to keep young people here building their own companies,” Rogers says. Schuh says business backers also volunteer for the program as speakers, company advisors, and judges during the camp. Past speakers include Mike Miller representing Tesoro; Anand Vadapalli, CEO of Alaska Communication Systems; Marilyn Romano with Alaska Airlines; as well as speakers from several smaller business, which help broaden the range of professional experiences to which students are exposed, Schuh says. If you’d like to get involved with the 2016 Alaska Business Week, volunteer judges are needed from 8:30 to noon, Friday, July 22 to act as stockholders and potential investors for the company presentations and tradeshow. To signup, contact nschuh@alaskachamber.com, or 907-278-2744. R Heather Resz lives in Wasilla. She’s told Alaska’s stories for nearly twenty years.

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July 2016 | Alaska Business Monthly

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SPECIAL SECTION

Telecom & Technology (Inset) Alaska Marine Exchange Executive Director Captain Ed Page at AIS site built on Kayak Island, Cape St. Elias in the Gulf of Alaska, about 100 miles west-southwest of Mount St. Elias and about 70 miles southeast of Cordova. Alaska Marine Exchange’s installation and test vessel Cleat on a trip to install a vessel tracking system at Tracy Arm near Juneau in Southeast Alaska. Photos courtesy of Alaska Marine Exchange

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Alaska Business Monthly | July 2016www.akbizmag.com


Arctic Tracking Technology Mariners gain from Alaskans By Rindi White

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laska has one of the most extensive vessel tracking systems in the world, covering 1.3 million square miles of water. Along the 6,640 miles of coastline in Alaska, the Marine Exchange of Alaska has installed 120 vessel tracking receiving sites from the Beaufort Sea to the Aleutian Islands and Southeast Alaska.

Constant Monitoring

From a quiet office in Juneau, twenty employees maintain the system and keep track of every transponder-carrying vessel in Alaska waters, around the clock. The employees are largely former US Coast Guard workers or others familiar with the maritime industry. If they notice a vessel that hasn’t moved in a while or one behaving erratically, they might be the first to make a call to the Coast Guard, advising them of a potential problem.

“We know within ten feet where a vessel is. We can tell which end of the boat the transponder is on. And we receive a position update every six seconds.”

—Paul Fuhs Founder, Alaska Marine Exchange

The Exchange is a nonprofit organization created in 2000 to “provide valuable safety, navigational, and logistics information to the maritime community and provide a virtual ‘safety net’ that also contributes daily to the efficiency of maritime operations,” according to its website. They use satellite and Automatic Identiwww.akbizmag.com

July 2016 | Alaska Business Monthly

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Men working on Alaska Marine Exchange communications tower at Eldred Rock Lighthouse, from left: Nick Hatch, Bryan Hinderberger, and Rob Mayer. Courtesy of Alaska Marine Exchange

fication Systems, or AIS, technologies to accomplish that goal, founder Paul Fuhs says. The system has been online since 2005. “The accuracy of those receivers can be plus or minus three meters,” Fuhs says. “We know within ten feet where a vessel is. We can tell which end of the boat the transponder is on. And we receive a position update every six seconds.” All that data is housed on a large server in Juneau, with backups in the Lower 48. The immediate data is used by the Coast Guard to assist with search and rescue operations. 24

“It changes the way you do business,” says Paul Webb, manager of the 17th Coast Guard District’s Operations Center.

Created on the Back of a Napkin

Fuhs, who was mayor of Dutch Harbor at the time, and Coast Guard Captain Ed Page created the Exchange on the back of a napkin over dinner, after discussing lives lost at sea and how to make Alaska waters safer for mariners. The pair patterned the Exchange on similar vessel tracking exchanges in the Lower 48. International vessels were al-

ready equipped with transponders sending out longitude and latitude. But, at the time, those signals were not being picked up in Alaska waters. “They were all transmitting, but there was nothing here to receive them by,” Fuhs says. In the Lower 48, the vessel tracking systems were mostly built and maintained by the Coast Guard, Webb says. Fuhs says the Exchange used money given to the state as a result of the Exxon Valdez oil tanker spill settlement to build the backbone of the system. The crew installed a few receiver sites

Alaska Business Monthly | July 2016www.akbizmag.com


at first, then more and more as they were able to afford them. After the launch, the organization shifted its funding focus to the contractual arrangement used today. The cost of setting up a receiver site varies widely, Fuhs says. If it can be housed on a building that already has Internet access and electricity, the cost could be around $10,000. But if the receiver site needs to go on a remote island and it needs to bring its own power-producing capability, the cost could be as high as $100,000. “We put in solar panels, wind [turbines], and maybe a fuel cell to operate on backup,” he says. Haul all that up to the top of a remote mountain and install it and the $100,000 price tag seems like a pretty good deal. Fuhs says the Exchange has placed all of the “easy” receivers and is now working to install the remaining few—all in remote spots. Meanwhile, he says, the team is considering overhauling the receiver sites to turn them into dual-use sites that can also transmit local weather data to ships in the area. “We intend to add weather stations with wind velocity, barometric pressure, temperature, all those things, so you’re getting real-time weather data,” Fuhs says. In the far north, he says, the Exchange would like to incorporate ice data as well. “That’s the holy grail for us, if we can get it right,” he says. “Right now, we’ve kind of got [ice data] by satellite, and there are companies that go out with drones.”

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Bringing 21st century technology to the Arctic. Quintillion, headquartered in Anchorage, is building and will operate the Quintillion Subsea Cable System, bringing affordable high-speed Internet access to the Arctic for the first time. This is the first phase of a multi-phase project that will ultimately connect Europe and Asia with a 15,000 km fiber optic cable. Phase 1, in-service Q1 2017, will consist of a main cable trunk that will run off the coast of Nome to Prudhoe Bay, Alaska, with branching lines into the coastal Alaska communities of Nome, Kotzebue, Point Hope, Wainwright, Barrow and Prudhoe Bay. Terrestrial fiber from Prudhoe Bay to Fairbanks will connect the Quintillion system to existing fiber in Fairbanks.

Qexpressnet.com

Passive Data

The Coast Guard operates three command centers in Alaska: the 17th District and Sector Juneau, both in Juneau, and Sector Anchorage Command Center in Anchorage. Each command center has access to the Exchange data through yearly contracts, which contribute about one-third of the roughly $4 million annual operational cost. Private industry contracts—mostly maritime—cover half the operational costs. The state of Alaska also contracts with the Exchange for data. Webb says the Coast Guard’s use of Exchange data has changed the way they do business. The data is passive, available on screen at all times, and vital if something starts to go wrong. “It’s second nature in search and rescue for us to turn to that [data],” he says. Not every vessel is tracked—many fishing vessels don’t carry transponders. “If we get a report of a vessel and we don’t have a position for them, if it’s a large enough vessel and we’re able to use AIS, we’re able to see it. If it’s getting close to shore, we can see it coming. Vessels that are drifting and broken down, we get reports from the Exchange on them. We can alert the right people,” Webb says. www.akbizmag.com

July 2016 | Alaska Business Monthly

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Red dots indicate the 120 Alaska Marine Exchange AIS vessel tracking receiving sites in Alaska. MAP: Courtesy of Alaska Marine Exchange

NOAA Surveys

NOAA (the National Oceanic and Atmospheric Administration) uses Exchange data to help decide where to conduct surveys in the millions of square miles of water not yet surveyed. As the nation’s chart maker and updater, NOAA conducts hydrographic surveys to acquire essential data, such as depth measurements and the location of underwater features, to update said charts for maritime navigation. Each year, the agency surveys areas that are critical to safe navigation. Tim Smith, NOAA’s regional navigational manager for Alaska, says NOAA gets data from the Exchange including which types of vessels use a particular area, how many ships are passing through a particular area in a given time period, and other details. “They can help determine where things rank, priority-wise, on what areas we’re going to need to survey,” Smith says.

More Benefits

Another benefit of tracking ships as they travel through Alaska waters is a wealth of new data is becoming available. How many ships per year go through Unimak Pass, near Dutch Harbor? Ten years ago, Webb says, no one knew. Today the data is readily available. In Southeast Alaska, Fuhs says local leaders are looking into building another dock somewhere in the region. Using Exchange data, regional leaders hope to identify a safe spot in the congested waters for a new dock. The software is used for more than just tracking vessels. The Exchange is also using the system to monitor all the fiber-optic cables in Alaska waters, Fuhs says. If a line is cut under water, the Exchange can pinpoint pretty quickly what vessel crossed the cable when the outage happened. Shell Oil operated its drilling ship the Noble Discoverer in the Chukchi Sea during whaling season and concerns were raised about the safety of whalers with the marine traffic to and from the drilling ship. “We put a digital fence up and Shell told its contractors not to go in there,” he says. The Exchange tried another way to make it safer for whalers, Fuhs says. The group did an experimental test, sending out transponders on whaling boats. Individual transponders cost about $1,000, are about half the size of a laptop, and require either a 12-volt battery or to be connected to the boat’s power. “They’re out there in the fog and another ship will see them on their screen and avoid them,” he says.  R

Rindi White is a freelance journalist living in Palmer. 26

Alaska Business Monthly | July 2016www.akbizmag.com


SPECIAL SECTION

Telecom & Technology

Local Alaska IT Solutions for Alaska businesses of any industry or size By Tasha Anderson

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t’s not at all controversial to say that technology is an integral part of doing business, no matter a company’s size, industry, or location; however, for any Alaska business, there is an appropriate IT solution.

Arctic Information Technology

Meara Boling, general manager, Platform & Infrastructure for Arctic Information Technology, says the bulk of the work the company performs in Alaska is their Managed Services offering, a flat-rate IT service for businesses typically ranging from ten to seventy-five employees. “They get access to a team of IT professionals: unlimited help desk five days a week from 8 a.m. to 5 p.m., anti-virus and anti-malware, remote monitoring and maintenance, system patching, those types of things, as well as strategic consulting and guidance about their IT needs and options,” Boling says. Some small and medium businesses may hesitate to contract with an outside IT provider: “The shortfall of businesses that have their own ‘IT guy’ is that guy or gal implements or prescribes only what they know,” says Arctic Information Technology President Steve Dike. “We can’t tell you how many times we’ve been called in and the client says their IT guy has their server in his house; businesses can get held hostage.” Senior Account Executive Mark Mathis adds, “It could [also] be something as simple as ‘Our IT person has gone on vacation for three weeks and we can’t get in touch with them.’”

Remote IT

“It’s wonderful to work in the last frontier, but there are a number of challenges,” Boling says. As with most business in Alaska, access can be a problem, whether it’s physically bringing equipment and appliances to remote locations or having access to affordable, high speed Internet. “Internet bandwidth and cost continue to be an inhibiting factor in some cases, or certainly a challenge at the minimum,” she says. She says the company schedules regular onsite visits with their clients, but most of their maintenance work is done remotely. In fact, Mathis says one of their largest managed services clients is in Cordova. “We’re 28

using best-in-class tools to manage our client environments, and we do as much as we can, within reason, remotely across the network connection, collecting telemetry and system log data to be as proactive as we can.” Mathis, Boling, and Dike all credit their ability to work with clients, particularly in remote or rural locations, to adamantly maintaining a client-first mentality. “In terms of working in communities outside of Anchorage or Mat-Su, part of our success really is in those relationships,” Mathis says. He continues, “Our primary driver is relationships, followed by process, followed by flexibility.” Dike says their process is powered by “some of the most advanced toolsets” available. “It’s basically an agent that goes on a computer and sends us system information; it tells us what’s happening so we know problems often before they occur,” he says. When a problem does occur, Arctic Information Technology can sometimes diagnose it before the client even realizes that something is wrong, significantly reducing any company down-time. When non-IT personal in remote locations are aiding Arctic Information Technology with diagnosing a problem, it can take a bit of creativity to communicate accurately. “People take pictures of their screens with their phones—that’s the new screenshot,” Dike says. Dike says that, after managed services, the largest portion of their work currently is migrating businesses to cloud services. Mathis says that, depending on the customer’s needs, Arctic Information Technology also provides cloud management services after the migration has taken place. He says Arctic Information Technology has “done some fairly sizable migrations for large organizations that wouldn’t typically look to someone like us to help run it, but just to get them from where they are to where they need to be.”

Resource Data, Inc.

While many large businesses opt to manage their IT in-house, Resource Data, Inc. (RDI) has carved out a place for itself in Alaska working for larger Alaska businesses. “Because we specialize in solving complex IT problems, we mainly work for organizations

Northrim Bank’s Ransomware and Cybersecurity Best Practices

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orthrim Bank Executive Vice President and Chief Information Officer Ben Craig says, “As a financial institution we are exposed to literally hundreds of thousands of [cyber] threats in a given year.” In the last eighteen to twenty-four months he says the bank has seen about a ten times increase in cyber-attacks. He says there’s been a significant uptick of a particular cyber threat in Alaska: ransomware. “Ransomware is basically like any other virus except that … it encrypts any file that you have access to, whether that’s locally on your computer or across a network, and then displays a message that says if you’d like to access these files you have to pay a ransom in order to do so.” Craig says that the single best thing to have in place to combat ransomware is a data restoration strategy. “The dark humor in this is they use really good encryption,” he explains, saying that breaking the encryption would require a NSA super computer. Further, the FBI recommends not paying the ransom, as there’s no guarantee that files will be restored and businesses that do pay may inadvertently be funding illegal or terrorist organizations and activities. “I say data restoration because everybody says, ‘I’ve got a backup strategy,’ but in reality if you don’t test it and make sure it works, you don’t have a strategy at all,” Craig says. He further recommends that any backup solution be asynchronous, which can help prevent ransomware from also infecting back up files. “That’s the number one step. The rest just fall into general good best practices,” such as avoid unfamiliar websites; don’t open emails from untrusted sources; don’t follow untrusted links; keep operating systems, programs, and applications up to date; install and maintain antivirus and anti-malware software; and use strong, unique passwords. One more tip? Turn off any option to preview emails: “Every time you display a preview, it’s going out and pulling that information down, so you’ve essentially opened the email at that point,” Craig says.  R

Alaska Business Monthly | July 2016www.akbizmag.com


with complex IT systems, which tend to be larger organizations, both government and private,” according to RDI Business Development and Marketing Manager Howard Earl. Some of the problems that RDI solves for its clients include fixing poorly performing and/ or overly costly IT systems; deciding capital investments to maximize return, minimize risk, and meet other business objectives; assuring IT projects are well conceived and managed; and eliminating inefficiencies caused by multiple systems that don’t share data. RDI was founded in 1986 by Daryl Scherkenbach to provide database and mapping services related to natural resources for mining companies, and Alaska Native corporations. Over time the company evolved, and now its “portfolio of services includes custom software design and development, mobile development, enterprise resource planning, technology upgrade/migration and transformation, technology assessments and planning, business analysis, project management, and IT services,” according to the company. One thing that sets RDI apart from other IT options in Alaska is their history and expertise in geographic information systems, or GIS. “We are the leader in Alaska in developing large GIS solutions, especially around spatial and environmental data management to support ex-

www.akbizmag.com

ploration and permitting of large resource development projects,” says Earl. RDI provides services to a wide range of industries and is able to support companies statewide. “We do work all over the state from the North Slope to Ketchikan—a few of our employees were even lucky enough to work for a client on environmental studies vessels in the Chukchi Sea,” he says. In 2015 RDI had 210 employees, including 21 employee owners, of which approximately 130 are located in Alaska, qualifying RDI as a large business itself. “Having a large presence in Alaska, we do work for oil and gas companies, the State of Alaska, utilities, Alaska Native corporations and the federal government. Beyond that we work for a wide range of clients,” according to Earl. RDI started offering IT system services to their clients six years ago, services that include “optimizing their infrastructure—the hardware, software, and network comprising their enterprise IT environment—and resolving their IT system problems.” Earl says that their clients have been a part of the cloud movement, “increasingly requesting virtualization and cloud services, desiring convenient, on-demand access to their applications and databases from anywhere with an internet connection.” One recent project RDI completed was designing a virtual platform large enough

to run the entire computing load for a State of Alaska agency. “For another client, we developed a process to consolidate VMware virtual machines from multiple physical locations to a single, modern virtualized datacenter in Anchorage,” Earl says. According to Earl, “Two characteristics distinguish our IT support services: First, we never charge a flat rate, monthly fee, or minimum charge; we only charge for hours worked. If our clients don’t need us around for a while, we don’t show up—and neither does an invoice. … Second, we augment existing IT staff with more than just extra hands: our professionals have the skills to provide business analysis, system design, custom programming, and complete implementation of IT systems.” RDI has grown significantly in the last thirty years, but just getting larger wasn’t, and isn’t, the company’s goal: RDI President Jim Rogers says, “We don’t look at growth as a mandate, but rather as a positive consequence of our good work. Consequently, we don’t have a large team of aggressive sales people but rather primarily rely on referrals and expanding our business with existing clients.”  R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

July 2016 | Alaska Business Monthly

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SPECIAL SECTION

Telecom & Technology

See and Be Seen with Patented LEAD-DOG Helmet Light Alaskans develop technology for bright lights By Scott Banks

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eave it to Alaskans to see a problem and invent a product to solve it. Sixteen years ago two longtime Alaskans, Bill Fischer and Steve Karcz, invented the LEAD-DOG Helmet Light in their garage. At the time, Fischer was a trailbreaker for the Iron Dog snowmachine race. Karcz was building a cabin across Cook Inlet from Anchorage, ferrying building supplies by snowmachine. Both needed a light to help them see off trail and illuminate the reflective trail markers at night. A flashlight clamped in their teeth wasn’t cutting it. They began to tinker. The first helmet light used a 90-degree elbow from a vacuum cleaner. They continued to refine it and now hold several US patents on the technology, most recently from the Canadian Commissioner of Patents.

Powerful Halogen Illumination The Helmet Light is fitted with a Halogen bulb powerful enough to illuminate the trail up to a mile away and it attaches to a helmet with a sturdy, self-adhesive VELCRO strip, so wherever one looks, that’s where the light shines. “With the light on, the entire LEAD-DOG Helmet Light glows a brilliant red for others to see in back of you and from the sides, like a taillight on your helmet,” Karcz says. “The brake light comes on when you apply your brakes for even more safety when riding with other people, especially when your machine’s taillight is obscured by snow or dust,” he says. No need to worry about batteries going dead because the Helmet Light is wired into the machine’s existing electrical system. “It should Steve Karcz assembling a LEAD-DOG Helmet Light. © Scott Banks

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take about forty-five minutes to install the wiring. A reasonably good home mechanic should be able to do it with no problem using our instructions,” Karcz says. It’s a small company, really just the two of them. In the early stages of its development kids, friends, and family helped test prototype lights, comparing different models in all kinds of weather conditions. Parts are made out of state, but the lights are built, packaged, and shipped in Anchorage. Cost is between $80 and $85, and the lights can be ordered online at helmetlight.com or purchased at power sports retail outlets.

Not Just for Snowmachines

The light doesn’t just cater to snowmachines; it also will mount on ATVs and motorcycles, with or without a battery. Karcz says they have shipped the lights to dirt bikers in Hawaii who say it is invaluable at night when they ride across pitch-black lava flows. Search and rescue teams mount LEAD-DOG on their ATVs to help in their efforts. The Hamburg Volunteer Fire Department ATV Search and Rescue Team in New York state has two lights that they use during searches, rescues, and other off road emergencies. “They are also fantastic for lighting up patients when we are administering first aid,” says Captain Ted Cheney of the department in a testimonial on the LEAD-DOG website. Customers have asked about using an LED light instead of the Halogen bulb they currently use. Karcz says that is in the works, but he cautions the difference. “A Halogen bulb burns warm so any snow that builds up on the lens is going to melt. LED lights burn cool so you won’t have that advantage and there will be a danger of reduced illumination,” he says. It’s no coincidence that its name is LEAD-DOG Helmet Light because of Fischer and Karcz’s close association with the Iron Dog snowmachine race, Alaska’s 2,031-mile cross country race between Anchorage and Fairbanks via Nome. Many pro class racers use it, including the 2016 winning team Tyson Johnson and Tyler Aklestad. “We figured if the light could survive the punishing conditions of the Iron Dog, then it’s a tough light,” Karcz says. R Freelancer Scott Banks writes from Anchorage.

Alaska Business Monthly | July 2016www.akbizmag.com


Lisa Purinton THE MEETING: Association of State Uniform Crime Reporting Programs Annual Conference September 26-29, 2016 150 delegates Estimated Economic Impact: $170,000

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runch the numbers, and you gain valuable insights. Members of the Association of State Uniform Crime Reporting Programs help law enforcement learn more about public safety through data. Alaskan Lisa Purinton helped the group run the figures on a meeting in Anchorage; as a result, the Association convenes in the city this fall.

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© Quintillion

SPECIAL SECTION

Telecom & Technology

Phase 1 of the Quintillion project to connect the world via undersea and terrestrial fiber optic cable is underway in Alaska this summer.

Advances in Rural Telecom Increasing speed and capacity

to bring remote communities from Ketchikan to Barrow into the 21st century.

By Julie Stricker

For instance, the 4,200 residents of Barrow have only been able to get 2G wireless service—a standard for signal strength introduced in 1999—but will be upgraded to 4G by the end of the summer, says Jens Laipenieks, director of operations for the Arctic Slope Telephone Association Cooperative (ASTAC). Bigger improvements are on the horizon. “We have been preparing our network for the new fiber landings for the past few years and are increasing our network investments in 2016,” he says, noting ASTAC has more than thirty years of operations experience on the North Slope and was building networks in northern Alaska before the advent of the Internet.

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ost of Alaska’s residents live in relatively urban areas with bigcity amenities such as chain stores, restaurants, and high-speed Internet. The majority of the state’s communities are off the road system and lack those conveniences, but that is starting to change. In the past few years, four major companies, AT&T, GCI, Alaska Communications, and Verizon, in partnership with local telecoms, have poured hundreds of millions of dollars into infrastructure 32

Barrow Upgrades

“Our modernization efforts include upgrades to our voice switches to support VoIP [and] improved local access equipment [electronics] as well as installing fiber optic cabling to the premise. We are also in the second year of significant upgrades [to] our wireless network across the Slope with a goal to have all ASTAC markets upgraded to 4G by year end,” Laipenieks says. The new 4G service will deliver data speeds similar to what subscribers in urban areas receive today. ASTAC works in partnership with AT&T, which has a network covering 365 million people in the Lower 48 and Alaska. “In early 2015, we expanded upon [the partnership] with an agreement to enhance our wireless service across the North Slope,” Laipenieks says. “By joining forces and efficiently manage spectrum and back-

Alaska Business Monthly | July 2016www.akbizmag.com


haul capacity, we are able to greatly improve our subscribers’ user experience on the Slope and while roaming.”

Carrier Investments

Over the last three years, AT&T has invested nearly $175 million to enhance its networks in Alaska, says Chris Brown, AT&T director of network services for Alaska. “Over the last three years we’ve invested a good amount of money expanding our wireless network in various places around the state,” he says. Most communities have some level of coverage already, so AT&T and the other telecoms have been focusing on increasing capacity. GCI has spent hundreds of thousands of dollars over the past five years to improve service and expand wireless in rural areas, such as a hybrid fiber-optic/microwave TERRA system that links communities such as Dillingham, Bethel, and Unalakleet. In Southeast Alaska, the impact of tourism extends to the telecom infrastructure. Every spring, giant cruise ships sweep into Southeast Alaska, their sheer size dwarfing the small port communities they serve. Thousands of passengers disembark at once, all with cell phones in hand, ready to take pictures and videos, post them to Facebook, Twitter, Snapchat, or Instagram, or even call to check in with the folks back at home to tell them about their vacation. That’s a heavy load for a small town’s telecom capacity, so for the past several years AT&T has been working to expand the capacity of its networks in the region. Although the improvements were made in response to the impact of tourism, the communities benefit from the expanded capacity year-round. Over the next couple of years, AT&T plans to continue to increase network capacity, adding backhaul and data capacity at its existing sites. “The rate of consumption of aggregate data has gone up substantially,” Brown says, and smartphone use is expected to continue to grow. AT&T added several Alaska markets to its network, including the North Slope and Cordova, as well as launching high definition voice in Anchorage, Fairbanks, Juneau, and Ketchikan and expanding its LTE network to Fort Wainwright. AT&T has focused its coverage along Alaska’s road system from the Kenai Peninsula, Anchorage, and north to Fairbanks, Brown says. The company also has a standalone wireless switch in Nome and covers the length of southeast Alaska from Haines to Skagway. LTE refers to the technology that allows both data and voice on the same channel, he says. “It amounts to a more efficient use of the spectrum of the LTE to create a higher speed download.” www.akbizmag.com

“From a population standpoint, we capture an overwhelming portion of the state,” Brown says. Even when the population shifts, suddenly.

That wasn’t the case this year. That’s because AT&T sent in its COW. A COW is a cell on wheels system that AT&T deploys to remote sites, such as wildfire command centers. Arctic Man provided an ideal test of its capacity, Brown says. “We have our own fiber that runs up the Richardson Highway,” Brown says. The COW was customized for the event and was able to provide enough capacity for the thirteen thousand people who turned up for a week of races and parties. “We were able to get 100 megabits per second for an iPhone,” he says. “That’s pretty fast.”

Spot On

That’s the case one week in April each year when thousands of people converge upon a usually lonely spot in the Alaska Range for the annual Arctic Man Classic ski and snowmachine race. With thousands of people in attendance, the event becomes the equivalent of the fourth-largest city in the state, albeit one with almost no phone or Internet access.

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It’s the same technology AT&T has deployed to help support firefighters, such as those battling the Anaconda Creek Fire in 2015 just outside AT&T’s normal coverage area in Two Rivers, twenty-five miles northeast of Fairbanks.

Arctic Coast Coverage

In rural Alaska, villages among the Arctic coast are in line to get a big boost from a project to link Europe and Asia with a highspeed fiber that is following a route over the top of the North American continent. Quintillion, a telecommunications company based in Anchorage, is laying a fiber-optic cable along a ten-thousandmile route across the Northwest Passage, the Bering Strait, and the northern Pacific Ocean. The cable is capable of speeds of 24 terabytes per second. (One terabyte equals 1,024 gigabytes. One gigabyte equals 1,024 megabytes.) Quintillion will provide service between the main cable and village telecoms such as ASTAC in Barrow, OTZ Telephone Cooperative in Kotzebue, and TelAlaska. Quintillion spokesman Tim Woolston says work is underway around the clock this summer as Quintillion prepares to lay cable. The Alaska section is Phase 1, and workers have been busy at the landing site

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communities to prepare for the arrival of the cable. Subsea cable installation is scheduled to begin this summer, Woolston says. “It’s a 24/7 construction schedule. There’s a window in which work needs to get done because of the seasonality of the ice up there,” he says. “We think that the benefits will be tremendous,” Woolston says. Laipenieks of ASTAC agrees. “High-speed internet access via the new fiber will be unlike anything our members have experienced before,” he says, noting key advantages are cost, reduced latency, and reliability. “The amount of capacity available on the fiber is immense, measured in terabits per second compared to megabits,” he says. One immediate benefit will be a reduction in cost per bit from current satellite rates, and those costs are expected to continue to shrink over time as traffic increases. The delay inherent in satellite connections due to the time takes for the signal to travel to and from the satellite will be all but eliminated. Unlike satellite service, fiber optics are not affected by wind, rain, snow, or solar interference, Laipenieks says. “The improved Internet on the North Slope will begin to close the gap that has

grown between the urban and rural markets in Alaska,” he says. “Urban Internet subscribers have access to Internet products with very high data rates and low latency enabling all the benefits of the modern Internet. Rural education, healthcare, streaming entertainment, and e-commerce are just a few areas that will rapidly evolve on the North Slope because of the improved broadband access.” Other villages along the Arctic coast also will be able to access the fiber and a trunk line to Fairbanks that will tie in to existing high-speed fibers is also planned. It will be up to the local communities and local service providers about what is done in each community, says Woolston. “The advent of high-speed Internet will introduce new health and education services, lots of opportunities to spur economic development, empowering local businesses to work faster. It will give users access to video,” he says. “It’s bringing 21st century technology to the Arctic. It’s long overdue.”  R

Julie Stricker is a journalist living near Fairbanks.

Alaska Business Monthly | July 2016www.akbizmag.com


Commercial Insurance Employee Benefits Personal Insurance Risk Management Surety


SPECIAL SECTION

Telecom & Technology

Commercial Drones Boost Fairbanks Startups A Ptarmigan unmanned aerial vehicle flies over the tundra. Photo courtesy Northern Embedded Solutions

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Alaska Business Monthly | July 2016www.akbizmag.com


NES and Aquilo on cutting edge of new technology By Julie Stricker

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or the past decade, biologist John O’Brien of ERM Alaska has been looking for a way to use unmanned aircraft to count salmon in Alaska rivers. In October 2015, he finally got his chance. O’Brien met up with two people from a Fairbanks startup to compare a drone survey of salmon in Lignite Creek near Healy with a traditional helicopter survey. The experiment was a success. The drones, operated by Carl France and Corey Upton of Aquilo LLC, came back with markedly clearer and more stable video of the salmon in the creek, O’Brien notes. “This is a great demonstration of the utility of this technology and it can be done safely and responsibly with low impact and extremely environmentally friendly with outstanding results,” O’Brien says in the video. A couple of weeks earlier, the crew was

out filming an early season snowfall and came on a group of linemen trying to diagnose a power outage. They sent their drone along the powerline and helped the line crew pinpoint where trees were shorting out the lines, saving them hours of slogging through deep snow.

Booming Industry

Unmanned aircraft systems are booming, and Aquilo is at the cutting edge of a burgeoning industry. With the motto “Making Drones Work,” Aquilo is one of a handful of FAA-approved commercial drone firms, offering unmanned systems operations, consulting, and training in Alaska and the Northwest. Carl France is CEO. It is a subsidiary of Northern Embedded Solutions (NES), an engineering design firm started by three University of Alaska Fairbanks (UAF) engineering graduates. The trio started NES to develop data loggers, mini-computers that could be embedded in things such as unmanned aircraft and scientific instruments. They work closely with the Alaska Center for Unmanned Aircraft Systems Integration at UAF. NES founder Ben Neubauer helped design and build the Ptarmigan hexacopter, a workhorse for the

organization. They also designed payloads and instruments carried by unmanned aircraft and are developing ideas such as smart plugins for cars, among other things. NES was created as a way to market the technology. Neubauer moved away, and NES is now a three-way partnership between Steven Kibler, Corey Upton, and Samuel Vanderwaal. All three have strong ties to Fairbanks and were looking for a way to use their technical knowledge without having to leave the area. They found it in the rapidly expanding field of unmanned aircraft systems and associated technology.

Job Opportunities

Although NES’s partners have close ties to UAF, it is a private company and isn’t directly affiliated with the university, says Vanderwaal, who joined NES a few months after its startup. However, UAF is turning out some very talented engineers, many of whom NES hires to work on various projects. That gives NES a strong pool of workers and provides them with beefy projects for their resumes. “There’s a surprisingly good tech base here,” Vanderwaal says. “The goal is to help Aquilo CEO Carl France (left) operating the controls of a drone on a salmon counting demo with ERM Alaska freshwater biologist John O’Brien last October. Photo courtesy of Aquilo

www.akbizmag.com

July 2016 | Alaska Business Monthly

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Photo courtesy Northern Embedded Solutions

A Northern Embedded solutions/Alaska Center for Unmanned Aircraft Systems Integration Ptarmigan unmanned aerial vehicle and control interface.

create a tech industry here in Alaska and hire these tech students who want to stay in Alaska and give them job opportunities.” NES is also reaching outside the state. It is working with a lithium ion battery manufacturer in California to write new firmware and is working with Lockheed Martin on payload integration. NES’s work with Alaska Center for Unmanned Aircraft Systems Integration allowed them to go into the field to operate unmanned aircraft before there was a commercial opportunity to do so. The first commercial drone operation didn’t take place until June 6, 2014, and the FAA still hasn’t completed new rules overseeing commercial drone operations. But industry is discovering how much better the clarity, stability, and detail of the data drones can collect versus traditional helicopter or small plane operations. It is also much safer. Drones are ideal for tasks that are “dirty, dull, or dangerous,” Vanderwaal says. That includes infrastructure inspections such as flying over pipelines with a thermal camera, 38

or creating a three-dimensional model of a wind turbine. Drones are also safer than in situations where it’s necessary to put people up by an antenna tower or power lines or turbine blades. It is also ideal for mapping forest fires or sampling gases from a volcanic eruption, among many other potential uses. NES spun off Aquilo to take advantage of those commercial opportunities, which Vanderwaal says could position Alaska as a tech mecca on par with Silicon Valley. “This is brand new,” he says. “Some people are predicting it’s going to be a $20 billion opportunity in the next twenty years.”

Drone Regs

That opportunity is brought in part by recent changes in FAA regulations regarding drones. Hobbyists who buy an unmanned vehicle only need to register it, stay more than five miles away from an airport, and keep the drone in sight while flying. For commercial operations, the rules are more stringent.

Three things are required before any aircraft, big or small, enters national airspace: the aircraft must be registered with the proper certification; a licensed pilot; and operational approval. The drone must also be flown during daylight hours and operators must stay in visual contact with it. “I anticipate that’s going to change, but I anticipate it’ll be three to five years,” Vanderwaal says. That would open up opportunities for beyond-line-of-site operations such as inspecting oil and gas infrastructure, search and rescue missions, minerals mapping, or assessing storm damage. The FAA plans to release comprehensive rules about commercial drone operations, but not until 2017. But because of the demand for such services now, in 2015, the FAA came up with special rules that allow operators to get waivers. A Section 333 Exemption to the 2012 FAA Modernization and Reform Act grants the US Transportation secretary the authority to determine if an airworthiness certificate is required for an unmanned aircraft to operate

Alaska Business Monthly | July 2016www.akbizmag.com


Photo courtesy of NES/Aquilo

in national airspace. It provides operators who wish to pursue safe and legal entry into the national airspace a competitive advantage in the marketplace, while improving safety and discouraging illegal operations, the FAA states. “It is anticipated that this activity will result in significant economic benefits, and the FAA administrator has identified this as a high priority project to address demand for civil operation of UAS [unmanned aircraft systems] for commercial purposes,” the agency states. The exemption gives operators a competitive advantage in the UAS marketplace. Without the exemption, permits can take months to acquire. Aquilo already has its FAA certification and is exploring many opportunities.

Changing Perceptions

It’s a fast-growing field, and the perception of drones has changed dramatically in just a few years. While many in the field dislike the word drone because of its early military connotation, preferring instead to use terms such as UAS, Vanderwaal uses the word drone casually. “What we’ve seen in the last couple of years is that people are connecting drones with the quadcopter-type of vehicle,” he says. Those changing perceptions and the rapid advances in technology could help

Aquilo performing air space safety training near the Nenana Airport in April under their Certificate of Authorization granted by the FAA.

develop a tech industry in Alaska that would bring money into the state and keep talented workers here. “I think Alaska needs a more diverse economy,” he says. “We’re still tied to the vagaries of resource development, which creates boom and bust. Alaska has never been a

hotbed for the tech industry, but we feel we have a really good opportunity for it.”  R

Julie Stricker is a journalist living near Fairbanks.

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July 2016 | Alaska Business Monthly

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HR Matters

By Kevin M. Dee

The Price of Conflict What you need to know

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hy can’t we just all get along? How many times have we heard that refrain? Well, I have some good news and some bad news: Interpersonal conflict is a part of life and is here to stay. In fact, conflict is an inevitable and natural part of all relationships at work and at home. Conflict itself is not the problem—unresolved conflict is the problem. The good news is that there are beneficial ways to manage conflict. The bad news is that it is often uncomfortable to implement changes in organizational culture. It is, however, well worth the effort! When an organization learns how to allow civilized disagreement to flourish and resolve, it empowers and energizes everyone. Here’s what you need to know.

Significant Costs

It begins with understanding what workplace conflict is all about and the costs of poor conflict management. The costs for poor conflict management in an organization have significant impact on morale, productivity, and turnover.

Turnover Costs as an Example

 Your annual salary: $_____________

 Multiply times 1.5 (150%) = $_____________ = Investment in you by your employer  Multiply times 1.5 (150%) = $_____________ = Cost of replacing you  Multiply times 0.6 (60%) = $_____________ = Average role of conflict in voluntary terminations  Multiply times number of voluntary terminations in your organization = $_____________ = Annual cost of conflict to your organization for Turnover

Managing Conflict The cost of poorly managed conflict in your workplace is significant to say the least. And yet, most organizations either do not have conflict management plans or do not allocate the resources and time to make them effective. Policies are just not enough 40

without follow through and training on how to solicit and manage healthy conflict so it gets resolved. Conflict resolution starts with how you were raised to deal with conflict. We all grew up in some sort of a family dynamic where we learned how to deal with conflict. You might have learned to avoid it all costs i.e., “If you can’t say anything nice, don’t say anything at all.” Maybe you had to sleep on it before surfacing an issue or maybe you just wanted to talk about it. Possibly you were raised that as soon as issues arose you ran to that other person, got in their face, and wanted to discuss it right away. However you were raised determines how you initially approach conflict and how you prefer or were expected to handle it. Your life experiences also have a strong impact on your conflict style. As an adult you are thrown into a group of people raised with different strategies who appear to be from another planet when it comes to conflict. The culture of your new job can seem like a foreign country where you often don’t speak the language and people are not saying what they mean. It also goes beyond just surfacing issues. Your family and upbringing taught you how to deal with the conflict once it was on the table or it was approached unspoken. Whether it was to win at all costs, find middle ground, or just give in, we all have our preferred fighting styles. Finally, we also have our post-conflict behaviors that determine how settlement of a conflict plays out. Some people forgive and forget. Others seek retaliation at every opportunity. Some people, who cannot forgive or forget, lie in wait with a smile on the surface and yet will attack with deadly precision when you least expect it. So what do you do when you find yourself working with this menagerie of players called your team and you want to know what to do to be successful and resolve issues?

Organizational Culture

The overarching factor in creating healthy conflict here is organizational culture. Most commonly, organizations are either

of the “see no evil, hear no evil” type or they use the “Hammer of Thor” to smash down conflict like they are playing a game of whack-a-mole. Then management wonders why the turnover is so high and productivity drops. Here are steps that high performance teams and organizations can take to create healthy conflict resolution.

You Can’t Manage What You Can’t Measure Implement metrics that measure progress against goals and the accomplishment of the mission of the organization. This is strategic planning at its best. Every team needs measureable goals that drive performance. Goals need to be individually owned and team success dependent on every person’s success so everyone is compelled to work together to create overall success. This creates conflict naturally as people want to achieve goals and non-performers feel the pressure to step up or promote themselves to the job market. Implement a Formal Conflict Management Program Institute a formal conflict management program and train everyone as to the “way” conflict is to be handled. I recommend this become an employee policy to hold everyone accountable. HR, when given adequate resources, can provide oversight and support to conflict management. A great conflict management program has some key ingredients and practices. I recommend the following:  Everyone agrees to surface issues of concern directly with person or team within a set period of time. 24 -48 hours works as this allows a cool-off period if needed. Alternatively they can surface it to HR as well.  Insure everyone is listening to both sides of an issue. Getting people to see the other side, not as right or wrong but as valid for the other side, is the biggest key to enabling resolution of conflicts. Creating an empathetic environment where introverts and extroverts listen to one another creates respect and trust.

Alaska Business Monthly | July 2016www.akbizmag.com


 Be soft on the people, hard on the problem. Separating the people from the problem surfaces the real issues that can be worked on. Determine if it is personal behavior that is causing resentment or concern and then HR can address it. If it is issue based, rational negotiation will work.  Focus on common ground. Where we agree (even if it’s small) is the basis for getting to an agreement on where to go from this day forward. When teams or individuals are stuck in the past, it is hard to get past blaming and fault finding or the right and wrong of the situation. Desired change can occur when teams or individuals start focusing on the preferred win/win future and what each party cares about.  Reframe conflict as an opportunity. Organizations that view conflict and issues as an opportunity to be overcome are much more adept at handling anything that comes at them. Everyone aligns to the mission and everyone feels their point of view is respected. Train managers and employees on healthy conflict management. One client I work with has a conflict ninja group of regular employees who mediate and facilitate conflict resolution.

Key Lessons

Kevin M. Dee has a master’s degree from Vanderbilt University and is the president of KMD Services & Consulting. He has been providing organizational development services, human resources consulting, and leadership development since 1984 in Alaska and internationally. Contact him at mail@kmdconsulting.biz. www.akbizmag.com

THE TOP OF THE WOR O T LD ME HO O C L E A Unique Arctic Oasis-Barrow’s Finest TE W Lodging Choice for Business or Leisure

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There are key lessons that conflict teaches us about how to be a better human beings as well as achieving together at our workplaces. By embracing diversity and enforcing respect for everyone we become stronger. Conflict is a constant in our life and work, and we each have a pre-disposition on how we handle conflict. It is imperative to learn how to manage conflict constructively to create more of what we want in the world. Underneath the surface of conflict, we all want similar things, and conflict can be a catalyst that helps us in finding that common ground if managed well. R

• 70 guest rooms • All amenities including free Wi-Fi, free cable, free local calls • Guest fitness room • Gift Shop • Guest laundry - coin operated • Meeting & conference rooms

Niggivikput “Our Place to eat”, Restaurant offers delicious full menu!

Experience friendly Inupiat hospitality and best accomodations available in Alaska’s Arctic! 3060 Eben Hopson, Barrow, AK 99723 • 907.852.3900

www.tundratoursinc.com

July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST JOB OPPORTUNITIES FOR COLLEGE GRADUATES—DENALI AWARD

DENALI Healthcare

A doctor with a boy at a Health Clinic in Southcentral Alaska. © Chris Arend / AlaskaStock.com

© Harry Walker / AlaskaStock.com

BEST JOB OPPORTUNITIES FOR COLLEGE GRADUATES— ST. ELIAS AWARD

BEST JOB OPPORTUNITIES FOR COLLEGE GRADUATES— FORAKER AWARD

Photo courtesy of ANSEP, the Alaska Native Science & Engineering program

A Doyon Drilling rig drills for oil at Drill Site 5 in the Prudhoe Bay oil field on the North Slope.

High school students are racing the motor vehicles they built during ANSEP’s Acceleration Academy. The activity is part of an innovative curriculum designed to ignite interest in STEM career fields. The students are, from left, Jared James, Tununuk; Xavier Jones, Kotzebue; Keith Perry, Palmer; and Sadie Sands, Dillingham.

ST. ELIAS

FORAKER

Oil & Gas Industry

www.akbizmag.com

Engineering July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST NEW ALASKA STARTUP—DENALI AWARD

DENALI Thank you to our community, friends, and families for supporting us and believing in our vision to start a neighborhood craft brewery in Eagle River, Alaska.

Odd Man Rush Brewing

10930 Mausel Street, Eagle River, AK 99577 907-696-2337 oddmanrushbrewing.com

BEST NEW ALASKA STARTUP—FORAKER AWARD

FORAKER

Craft brewing is of paramount importance at the 49th State Brewing Company. From start to finish we want to provide our guests with a product that we are proud to call our own. While this begins with clear Alaskan water, fine malts and hops, and yeast, we consider the entire experience at the 49th as reflective of our craft. Therefore, at the 49th you’ll have beer served by a staff of Cicerone Certified beer servers, proper glassware to accompany various styles of beer, a hearty menu to meet any hunger, and outdoor spaces to bring community to the 49th experience. And at the 49th, we hold the belief that every good beer should be paired with a good song. We are pleased to offer entertainment at both brewpubs, so everyone can celebrate the beer and music culture in Alaska. I’m from Alaska and we started this company because we saw a need for specific businesses and we saw things that were lacking. We really tried to create something

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focused on. It’s a labor of love and we believe in small business ownership and growth for our state. We had a concept and we were driven to make it happen and that’s how the 49th State Brewing Company started in Healy. It’s an honor to be named one of the best startups. And what makes a startup succeed is the constant push to get the business off the ground. Our team is phenomenal and has allowed us to be a truly Alaskan-owned hospitality company that incorporates our restaurants, brewpubs, and lodges. Whenever we start a season or a new brand, we tell all the managers in the startup that we’re not trying to reinvent the wheel, we’re trying to own our concepts and be great at executing them. We’re not risk averse. If you’re going to make it, you have to get a little uncomfortable sometimes. A solid plan peppered with some risk is the recipe for growth. The risks we’re taking are calculated and hopefully the business minds of Alaska get caught up in the wave and we see more small business owners taking over. For our latest startup, the 49th State Anchorage, we needed a spot that had the elements that make a perfect match to the Denali brewpub, i.e., a blend of community, tourism, and outdoors. When we found the location downtown at 3rd and G, that search was over. It was originally an Elk’s Lodge built in 1918. Over the decades it grew into a local social club where one in six people in Anchorage were members. The three-

unique in Healy and we’ve achieved that. We’re really excited to have won the award and it’s a reminder that locals want authentic Alaskan businesses in their communities and tourists are looking for that too. Alaska is built on people thinking big and dreaming big and we created something big because it hasn’t been done before and we’re taking this little company and making it a big company. It’s hospitality and it’s the core of what we’re trying to do in the state. —Jason Motyka It’s about a startup and the award is one thing but the evidence that speaks the loudest, is the warm reception we’re receiving from the Anchorage community. So many know our other businesses and have overwhelmed us with the positive feedback on our new brewpub opening. A lot of people talk about concepts and ideas—turning that into a reality is the challenge and that’s what Jason and I are

story property located on the water with a view of the Alaska Range had a private bar, dining area, bowling lanes, and ballroom which made it the gathering place in Anchorage. In ‘96, the Snow Goose bought it and transformed it into a brewery and commercial restaurant that fit right in with Alaska’s brew scene. As our new brewpub comes of age, you’ll find the approach and philosophy unchanged from the original Healy spot. We’re sticking to our full circle philosophy and working with other Alaskan businesses to procure services and goods for our company. We look to be stewards in the community to keep the craft alive, independent businesses thriving, and chain companies on the fringe. —David McCarthy

49th State Brewing Company Mile 248.4 George Parks Highway, Healy, AK 99743 907-683-2739 717 W. 3rd Avenue, Anchorage, AK 99501 907-277-7727 facebook.com/49thstatebrewingcompany

Alaska Business Monthly | July 2016www.akbizmag.com


BEST OF ALASKA BUSINESS

BEST NEW ALASKA STARTUP—ST. ELIAS AWARD

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Our founder and mother of two—Zoi Maroudas, has used her medical background and the Mediterranean diet to help grow strong healthy babies. Every product we offer starts with fresh organic ingredients farmed just for us. Our recipes are inspired by leading research and supported by pediatricians and allergists for allergy prevention, nutrition, and superior flavor. We guarantee parents quality and convenience. Our mission is simple: Real food parents can trust and flavors children will love.

ST. ELIAS

I am humbled and honored that our vision is shared that the quality of food for children is essential to life. This is an honor not just for us but we are sharing this with the farmers who grow the organic vegetables and the fishermen who provide us with the beautiful sustainable Alaska seafood— together we make an amazing product that benefits generations. —Zoi Maroudas, Founder and CEO

Are You

Headquartered in Alaska? At least 51% Alaskan owned

Willing to disclose

Number of employees? Gross Annual Revenues?* ABM uses the IRS definition for Gross Receipts as the ABM criteria for Gross Annual Revenues. *Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses. —Internal Revenue Service

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www.akbizmag.com

akbizmag.com/Top49er

Top 49er Awards Luncheon 9/28/2016

and ask to have a survey emailed to your company or call 907-276-4373

July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST TOWN TO GROW A BUSINESS—DENALI AWARD

Anchorage Map by Lucie Conoley/Courtesy of the Municipality of Anchorage

ANCHORAGE

DENALI

Credit for this award goes to the people of Anchorage—for being entrepreneurs willing to take risks for the businesses they want to grow, and for making this city a great market and talent pool. Credit also goes to those who make sure that our city has the schools, parks, trails, and infrastructure that make Anchorage a great place to grow a business. —Ethan Berkowitz, Mayor Municipality of Anchorage

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This award reflects the hard work of the Municipality of Anchorage in leveraging federal funds for programs that promote business growth, such as Startup in a Day, and in fostering new business growth, with programs like the Welcoming Cities initiative, that are conducive to a business friendly environment. AEDC is happy to support these efforts and work towards making Anchorage the number one city to live, work, and play. —Bill Popp, President & CEO Anchorage Economic Development Corporation

AEDC

Municipality of Anchorage

501 L Street, Suite 603, Anchorage, AK 99501 907-258-3700 aedcweb.com

632 West 6th Avenue, Anchorage, AK 99501 muni.org

Alaska Business Monthly | July 2016www.akbizmag.com


EAGLE RIVER

BEST OF ALASKA BUSINESS

BEST TOWN TO GROW A BUSINESS—ST. ELIAS AWARD

What a wonderful honor to hear the announcement that Eagle River has been voted “the best town in Alaska to grow a business”. Ours is a wonderful, thriving community with new and established businesses that serve the entire region. The mission and vision of the Chugiak-Eagle River Chamber of Commerce is to promote sustainable business and civic interest and to be the “most livable and unique community in Alaska.” We are proud of the local businesses and entrepreneurs who work diligently to provide great experiences and opportunities to meet the needs of residents of the region.

© Michael DeYoung / AlaskaStock.com

ST. ELIAS

—Dana Thorp Patterson, Executive Director

Chugiak-Eagle River Chamber of Commerce

12001 Business Boulevard, Suite 108, Eagle River AK 99577 907-694-4702 | cer.org

BEST TOWN TO GROW A BUSINESS—FORAKER AWARD

WASILLA You live in Anchorage and when you come to the Valley you see it as a whole, but each community has a niche: Palmer is government services—the DMV, pay court fees, see your probation officer, pay your taxes, get your driver’s license—people who live in the Valley go to Palmer for all that. Big Lake is recreation, Houston is industrial, Talkeetna is tourism. The City of Wasilla, our niche is retail, if you are going shopping in the Valley you’re going to go to Wasilla. In our 14 square miles, the number of total business licenses issued each year keeps climbing. Last year, in 2015, we issued 2,157 business licenses. That was up from 2,082 in 2014. So far in 2016 we are on track to be above last year’s. We keep going up every year and I would say that is based on two things: we’re user friendly and we don’t charge a property tax. User friendly is my motto for you as a business. I want your business to make a lot of money because if you make money the city makes money and its 2 cents on the dollar and the most is $10 a purchase, even if you buy a new car or truck. The sales tax is 2 percent and we added 1 percent for the library, so even when it went to that the max was $15 when it was 3 percent. We forward funded the library, we went to voters and raised the sales tax 1 percent and we raised $15 million. When we cut the ribbon this September on the new library—we’re not in debt. We raised the money first. We don’t charge a property tax in Wasilla. The cheapest place in the borough for a business is inside the city limits of Wasilla. Auto Zone came to Alaska to build five stores and built the first store in Wasilla. I asked why? They said because Wasilla is the fastest growing community in the state and the most user friendly in the state. We want you to get your business opened, we want you to make money, we want to be user friendly. A lot of it is the attitude of the city employees who work here and they try to be user friendly and try to help people. What we found out is one business feeds on another and any time you have a big box store come in then it’s the mothership and then you have the other ships come in around it. You see another three to five stores—other smaller stores that feed off that big box store that acts as a hub. A lot of people want to see us get a Sam’s or a Costco and we are chasing them every day trying to get them in the city limits. I don’t like to fly, but I would go to Arkansas and talk to them in person, if that would make a difference.

FORAKER

www.akbizmag.com

If you are going to go shopping in the Valley, I want you to come to Wasilla. —Bert Cottle Mayor of the City of Wasilla

City of Wasilla 290 E. Herning Avenue, Wasilla, AK 99654 907-373-9050 cityofwasilla.com July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST BUSINESS BREAKFAST—DENALI AWARD

DENALI

We open daily at 7 a.m. and breakfast is served all day.

Our menu features specialty Benedicts, omelets how you like ‘em, smoothies, and Kaladi Brothers espresso. Service is friendly and attentive so you can get back to work before your boss notices you’re gone! Free WiFi. Reservations are available on our website— snowcitycafe.com.

Snow City Café

1034 W 4th Avenue, Anchorage, AK 99501 907-272-2489 snowcitycafe.com

BEST BUSINESS BREAKFAST—ST. ELIAS AWARD

South Restaurant + Coffeehouse is honored to be awarded 2nd place in the Best Business Breakfast category. Our coffeehouse opens at 6:30 a.m. daily for your early morning meetings. Enjoy a breakfast panini, a smoothie, and a house baked sticky bun. If you’ve got more time on your hands, grab a table in our dining room after 9 a.m. There you’ll find larger plates like a Crab Frittata or a Croque Madame. Free Wi-Fi. Reservations available on our website—southak.com

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Thanks for voting Snow City Cafe Best Business Breakfast!

ST. ELIAS

South Restaurant + Coffeehouse 11124 Old Seward Highway, Anchorage, AK 99515 907-770-9200 | southak.com

BEST BUSINESS BREAKFAST—FORAKER AWARD Experience Alaska at Gwennie’s Old Alaska Restaurant, a famous Alaska landmark for over 30 years.

FORAKER

Gwennie’s Old Alaska Restaurant

4333 Spenard Road, Anchorage, AK 99517 907-243-2090 gwenniesrestaurant.com Alaska Business Monthly | July 2016www.akbizmag.com


The Glacier Brewhouse opened its doors on May 20, 1996 at 2 p.m. We are very proud to have served the Anchorage community for the last 7,300 days and we look forward to the next 7,300 and beyond. The Brewhouse and our management team would also like to thank each and every crewmember that we have had the pleasure to work with. Their individual efforts have ensured our success. Over the last twenty years we have employed hundreds of Alaska’s finest Managers, Chefs, Servers, Bussers, Bartenders, and Brewers and beyond. We are proud of their successes and for the opportunity to play a small part in it. In mid-September we will be hosting a barbecue and Oktoberfest event for a fun way to continue celebrating our 20th year as well as our fantastic beers.

DENALI

Glacier Brewhouse 737 W 5th Avenue, Suite 110, Anchorage, AK 99501 907-274-2739 glacierbrewhouse.com

BEST BUSINESS LUNCH—ST. ELIAS AWARD

BEST BUSINESS LUNCH—FORAKER AWARD

BEST OF ALASKA BUSINESS

BEST BUSINESS LUNCH—DENALI AWARD

Thank you for selecting the Bear Tooth Theatrepub for BEST LUNCH in the 1st annual Best of Alaska Business Awards! We’ve been working hard every day to enhance the Bear Tooth Experience for you; our solid core of supporters, your family and friends, and all of the fun International Visitors that Alaska brings. We will continue to provide World Class dining and entertainment and appreciate all of your support! Cheers!

FORAKER

Simon & Seafort’s Saloon & Grill

ST. ELIAS www.akbizmag.com

420 L Street, Anchorage, AK 99501 907-274-3502 simonandseaforts.com

Bear Tooth Theatrepub

1230 W 27th Avenue, Anchorage, AK 99503 907-276-4200 beartooththeatre.net July 2016 | Alaska Business Monthly

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DENALI

Kaladi Brothers Coffee kaladi.com

BEST COFFEE SHOP FOR BUSINESS MEETINGS—FORAKER AWARD

FORAKER The Jitters owners and staff are very appreciative for the recognition by Alaska Business Monthly magazine and our loyal customers. Thank you! Thank you! Thank you!

Jitters

11401 Old Glenn Highway, Eagle River, Alaska 99577 907-694-5487 jitterseagleriver.com

Alaska Business Monthly | July 2016www.akbizmag.com

Courtesy of Jitters

BEST OF ALASKA BUSINESS

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BEST COFFEE SHOP FOR BUSINESS MEETINGS—DENALI AWARD


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ST. ELIAS

Thank you so much for choosing us as one of Anchorage’s best coffee destinations.

It’s always been our mission to source, roast, and present the finest coffees possible, so we are overjoyed to see that you all love it just as much as we do. Thanks again, and we hope to see you at one of our cafes soon! www.akbizmag.com

SteamDot Coffee Anchorage steamdot.com

© 2016 Chris Arend Photography

akbizmag.com/subscribe July 2016 | Alaska Business Monthly

BEST OF ALASKA BUSINESS

BEST COFFEE SHOP FOR BUSINESS MEETINGS—ST. ELIAS AWARD

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BEST OF ALASKA BUSINESS

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BEST BUSINESS DINNER—DENALI AWARD

BEST BUSINESS DINNER—ST. ELIAS AWARD

On Friday, May 20th the Glacier BrewHouse celebrated 20 years! To celebrate our 20th year in business in Anchorage we had a ceremonial re-opening with a toast featuring our 20th Anniversary Ale—the Blood Orange XX IPA—and a ribbon-cutting ceremony with Bill Pop, President and CEO of Anchorage Economic Development Corporation, Seymour the Moose, and Mayor Ethan Berkowitz. We also had with us and honored our twenty-year employees who have been with us since opening: Coila Peterson, Rodney Hamilton, Robert McCormick, and William Warren. These four individuals have been instrumental in leading our teams and making us so successful. In mid-September we will be hosting a barbecue and Oktoberfest event for a fun way to continue celebrating our 20th year as well as our fantastic beers.

ST. ELIAS

Glacier Brewhouse

737 W 5th Avenue, Suite 110, Anchorage, AK 99501 907-274-2739 glacierbrewhouse.com

BEST BUSINESS DINNER—FORAKER AWARD

DENALI

FORAKER

Simon & Seafort’s Saloon & Grill 420 L Street, Anchorage, AK 99501 907-274-3502 simonandseaforts.com

Sullivan’s Steakhouse

320 W. 5th Ave, Suite 100, Anchorage, AK 99501 (907) 258-2882 | sullivanssteakhouse.com/anchorage

Alaska Business Monthly | July 2016www.akbizmag.com


BEST BUSINESS TAKE-OUT— ST. ELIAS AWARD

BEST OF ALASKA BUSINESS

BEST BUSINESS TAKE-OUT—DENALI AWARD

Photo courtesy of Peppercini’s Deli and Catering

Lunch is solved.

ST. ELIAS

Not in the mood for free delivery, or just want to come in and see our smiling faces? Peppercini’s offers a variety of takeout options to fit your unique needs and make lunch easier. Whether you are ordering from our catering or deli menu, we streamline your takeout experience by:

DENALI

Thank you for selecting the Moose’s Tooth for the Denali Award for Best Takeout in the 1st annual Alaska Business Awards!! Thank you for all of your support! As we celebrate the past 20 Years, we are continually impressed with our generous community! Cheers! Moose’s Tooth Pub & Pizzeria

3300 Old Seward Highway, Anchorage, AK 99503 907-258-2537 moosestooth.net

BEST BUSINESS TAKE-OUT—FORAKER AWARD

 Offering complete boxed lunch sets  Stocking a wide selection of bottled sodas, teas, juices, and energy drinks  Individually labeling items  Including names on each label for easy distribution to large groups  Packing your order in attractive, functional takeout containers  Orders can be conveniently placed online, over the phone, faxed, emailed, texted, Facebooked, carrier pigeoned…whatever!

FORAKER The Brown Bag Sandwich Company

535 W 3rd Avenue, Anchorage, AK 99501 907-277-0202 akbrownbag.com

www.akbizmag.com

Peppercini’s Deli & Catering 3901 Old Seward Highway, Suite 20 Anchorage, AK 99503 907-279-3354 AlaskaDeli.com

July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST CATERING—DENALI AWARD

Catering you can count on.

From breakfast sales meetings to lunch-and-learns to retirement parties to formal nighttime events, Peppercini’s has you covered. We regularly work with groups as small as ten to large groups over a thousand. We design our services to your needs and budget.

DENALI

For over a decade, we have been providing awardwinning express and full-service catering to Alaskans. Our simple mission has stood the test of time: conveniently and consistently provide quality meals and service to our customers at an affordable price.

 A crowd-pleasing variety of menu options  Last-minute order accommodation  Free, on-time deliveries  Free plates, napkins, utensils, and serviceware  Professional drivers to set up your order  Attractive, portable packaging for displaying food and storing leftovers

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Peppercini’s Deli & Catering

3901 Old Seward Highway, Suite 20, Anchorage, AK 99503 907-279-3354 AlaskaDeli.com

Alaska Business Monthly | July 2016www.akbizmag.com

Photo courtesy of Peppercini’s Deli and Catering

With Peppercini’s, you can expect:


BEST OF ALASKA BUSINESS

BEST CATERING—ST. ELIAS AWARD

BEST CATERING—FORAKER AWARD

We are thrilled that we have won the Foraker Award! Dianne’s WILD FORK CATERING, formerly Dianne’s Restaurant, has completed their transformation and is now operating exclusively as an off premise catering company in their new Spenard location. Although they do miss seeing their loyal customers from the Restaurant, they are still delivering “feel good food”—fresh, delicious, and creatively displayed, for your business meetings, open houses, and life celebrations. Photo © Rob Stapleton, AlaskaFoto.com | Courtesy of Alaska Coastal Catering

FORAKER

WILD FORK CATERING welcomes the opportunity to partner with you to create a memorable experience with a diverse selection of services, from breakfast and lunch buffets, gourmet trays to go, and full service catering.

Dianne’s WILD FORK CATERING Anchorage Alaska 99503 907-279-7243 wildforkak.com

Alaska Coastal Catering’s award winning “Smoked Alaskan Seafood Chowder” made with Alaskan grown vegetables, seafood, and Anchorage Distillery Glacier Melt Vodka. Alaska Coastal Catering, LLC is an Anchoragebased corporate catering company that provides food services throughout Alaska. The company proudly promotes and uses Alaskan-grown and Alaskan-made food products from such local companies as Anchorage Distillery, Alaska Natural Organics, Arctic Premium Natural Beef, and others. Gluten free menus are a specialty!

Warner Brothers Studios. She was fortunate to grow up learning the cooking styles of Baja California from her family’s many travels and has now mastered many Alaskan cooking traditions— with stylish presentations. Linford has made Alaska her home since 1993 and is a proud Chickasaw Native American.

ST. ELIAS

In addition to corporate catering, Alaska Coastal Catering also caters for private jets. Susie Linford, owner and chef, is from Southern California and a former caterer for Disney and

www.akbizmag.com

Alaska Coastal Catering, LLC

Anchorage, Alaska 907-230-6184 (cell) | 907-868-7655 (office) AlaskaCoastalCatering.com

July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST ALASKA BUSINESS APP—DENALI AWARD

We are pleased to hear that the Alaska Airlines mobile app has won the Denali Award for Best App in Alaska Business Monthly’s first annual Best of Alaska Business Awards. Our goal is to make travel as easy as possible, and our app is a key part of that goal. Business and leisure travelers alike depend on the app as a source of all their travels plans, up-to-date flight information, and quick access to their mileage plan accounts. Everything you need in one easy to use app. As someone who not only works for the company, but is also a frequent traveler, I know it is as important as anything else I need for travel. Thank you for this recognition. —Marilyn F. Romano Regional Vice-President Alaska

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Alaska Airlines

alaskaair.com

BEST ALASKA BUSINESS APP—ST. ELIAS AWARD

DENALI

This award means so much to us because we’ve worked very hard on The Alaska App for the last five years. We’re constantly adding new articles, videos, audio guides, and more. Our dream is no matter where you go in Alaska, our app will be as useful as talking to the most knowledgeable local.

ST. ELIAS Alaska Channel

507 E Street, Anchorage, AK 99501 907-777-7779 alaska.org | thealaskaapp.com

BEST ALASKA BUSINESS APP—FORAKER AWARD Alaska Railroad’s new website and the site’s easyto-navigate mobile version are designed to make it easier to do everything from book a ticket to find information about the Railroad’s history. The design and functionality were a collaboration between the Alaska Railroad and its advertising agency Spawn Ideas. —Bruce LaLonde Director, Passenger Marketing and Reservations

FORAKER

Alaska Railroad Corporation 411 W. 1st Avenue, Anchorage, AK 99501 AlaskaRailroad.com

Alaska Business Monthly | July 2016www.akbizmag.com


BEST OF ALASKA BUSINESS

BEST ANGEL INVESTOR—DENALI AWARD

The Municipality of Anchorage is honored to receive the Denali Award for its work supporting small business growth and development. Through the U S Treasury Department’s State Small Business Credit Initiative program, the Municipality has been instrumental in creating the economic environment for new business development and growth. The Municipality’s support for new business includes a series of investor networks, local equity funds, educational training opportunities, and the state’s first startup accelerator. —Robert Harris, Municipality of Anchorage CFO

DENALI

49th State Angel Fund

Anchorage, Alaska | 49saf.com

BEST ANGEL INVESTOR— FORAKER AWARD

BEST ANGEL INVESTOR—ST. ELIAS AWARD

ST. ELIAS The Bristol Bay Development Fund is honored to receive recognition as one of Alaska’s Best Angel Investors. The Fund has had a short life so far, but we believe it is already having an impact in the Bristol Bay region. It always feels good to receive public recognition for the work you are doing, but the real reward is seeing the results that the Fund is having in real people’s lives! The Bristol Bay Development Fund was launched in 2014 to give an opportunity to start or grow an existing business within the Bristol Bay region. BBDF helps through investment of dollars (from $20,000 to $500,000 in any one business) and with business planning, valuable connections, and coaching and advice. We have seen our communities’ populations decline over a period of time, and the fund gives the people of Bristol Bay an economic opportunity to grow communities again in a healthy and productive way. From its early investments, the Fund has seen more local hire, new services, and a continued excitement in the region around entrepreneurship. BBDF works to earn a financial return and provide benefit to BBNC’s shareholders through direct investment, employment opportunities, and new products and services that contribute to our shareholder’s lives. To date, BBDF has committed $950,000 in four companies and is working to reach $5 million in investments within four years. www.akbizmag.com

FORAKER

© Bristol Bay Development Fund

Cameron Poindexter at the Brussels Seafood Expo, the largest seafood expo in the world, on behalf of Naknek Family Fisheries. BBDF has several good prospects on the horizon and is very excited to announce those when appropriate. BBDF is a wholly

owned subsidiary of Bristol Bay Native Corporation. —Cameron Poindexter Bristol Bay Development Fund Manager Bristol Bay Development Fund

111 W 16t Avenue, Suite 400, Anchorage, AK 99501 907-265-7836 | bbdf.net

“Thank you to Alaska Business Monthly for recognizing the Angel Investment community and its importance to growing businesses in Alaska. I have been an active Angel for over twenty years and have never seen so many (and such qualified) opportunities here in Alaska as I do now. I am convinced that the entrepreneurial ecosystem has evolved (with the addition of The Boardroom and AEDC’s focus on entrepreneurship) and that we will be seeing great things in our very near future. As recent as two years ago, I made a commitment to move more of my investment activity focus to be here in Alaska and am determined to be a contributing force (both as an investor and advisor) to producing Alaska’s first scalable technology company.” —John Niles Wanamaker Alaska Venture Partners, LLC 907-830-3000 alaskavc.com

July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST PR FOR CHARITY—DENALI AWARD

DENALI

Take the Polar Plunge for Special Olympics Alaska

“Special Olympics Alaska would like to thank all the plungers, donors, and sponsors for their years of support to Special Olympics Alaska athletes statewide.”

Special Olympics Alaska

3200 Mountain View Drive Anchorage, AK 99501 Toll Free (Alaska) 888-499-7625 ext 605 907-222-7625 ext 605 | Fax: 907-222-6200 specialolympicsalaska.org

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Alaska Business Monthly | July 2016www.akbizmag.com

Photo courtesy of Special Olympics Alaska

—Jessica Bjornstad, Community Public Relations & Fundraising Manager


Sport is our Passion

© Doug Lindstrand / AlaskaStock.com

The Running of the Reindeer at Fur Rondy raises money for the US Marine Corps Toys for Tots program. It is one of the most popular Fur Rondy events and has become internationally acclaimed over the past nine years.

ST. ELIAS

Save the date for the next Running of the Reindeer: Saturday, March 4, 2017 at 4 p.m. on Fourth Avenue between H and D streets in Anchorage. People can start signing up in December at furrondy.net to participate in the 10th Running of the Reindeer to support Toys for Tots.

Toys for Tots toysfortots.org

BEST PR FOR CHARITY—FORAKER AWARD

Get Involved Today! specialolympicsalaska.org

Need statewide business exposure? Reach 86,50 to 105,50 readers per issue Be seen in print, online, newsstands, hotels, industry tradeshows and conferences, office lobbies, instate airline seatbacks and more! Charles Bell Vice President Sales 907-257-2909 Bill Morris Account Manager 907-257-2911

For 27 years, Covenant House Alaska has worked tirelessly to get our homeless youth off the dangerous streets and into safe shelter. Last year in Anchorage, more than 2,000 homeless youths walked through our doors seeking the resources that we offer, from mental health counseling to help with substance abuse or finding a job. We offer unconditional respect and love, with the intention of ending the cycle of homelessness.

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Janis J. Plume Account Manager 907-257-2917 Holly Parsons Account Manager 907-257-2910

Call one of our Advertising Account Managers today!

Covenant House Alaska 755 A Street, Anchorage, AK 99501 covenanthouseak.org

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Alaska’s Premiere Business Magazine

BEST OF ALASKA BUSINESS

BEST PR FOR CHARITY—ST. ELIAS AWARD

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BEST OF ALASKA BUSINESS

BEST NEW ALASKA BUSINESS TREND—DENALI AWARD

Raising a toast on the deck of the 49th State Brewing Company in Anchorage, from left, Della McCarthy, Kyler Chavez, Reeni Calinoff, and Randy Rexwinkle. © 49th State Brewing Company

Breweries Take a collective look at the winners of the Alaska Business Monthly’s first annual Best of Alaska Business Awards and it’s no surprise that Breweries wins the Denali Award for Best New Business Trend. Raise a toast to all the brewers in Alaska!

BEST NEW ALASKA BUSINESS TREND—ST. ELIAS AWARD

BEST NEW ALASKA BUSINESS TREND— FORAKER AWARD

FORAKER Restaurants & Food Wagons Photos by Tasha Anderson for Alaska Business Monthly

Locally Grown Food

ST. ELIAS

There is a gardening movement sweeping Alaska in greenhouses, backyards, resorts, lodges, patios and decks of posh eateries, and of course, the MatSu Valley where it was pioneered— Locally Grown Food wins the St. Elias Award for Best New Business Trend.

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DENALI

‘To eat or not to eat’ does not have to be determined by ‘to cook or not to cook.’ In addition to the excellent established eateries there are new ones starting up for Alaskans and the 2 million hungry visitors a year coming through, so it’s no wonder that Restaurants and Food Wagons won the Foraker Award for Best New Business Trend.

Alaska Business Monthly | July 2016www.akbizmag.com


DENALI

Thank you Alaska Business Monthly Magazine for this award!

BEST BREWERY ST. ELIAS AWARD

ST. ELIAS Check out the Midnight Sun Brewing Company’s Facebook, Twitter, and Instagram pages!

10930 Mausel Street, Eagle River, AK 99577 907-696-2337 oddmanrushbrewing.com

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FORAKER

Enjoy our video, Putting a little Alaska in a bottle – The Alaskan Brewing Story.

This is the story of the Alaskan Brewing Company. Founded against all odds in a remote Alaska town with no roads in or out more than 25 years ago, it hasn’t been an easy journey but the Alaskan Brew Crew wouldn’t have it any other way.

All of the footage in the video was taken in and around Juneau, Alaska with Alaskan Brewing crew, family and friends. Learn more about Alaskan at AlaskanBeer.com and connect with Alaskan at Facebook.com/ AlaskanBrewingCo and @AlaskanBrewing on Twitter.

We are extremely humbled and feel so fortunate, especially with all of the amazing breweries in the state of Alaska!!

Odd Man Rush Brewing

BEST BREWERY FORAKER AWARD

BEST OF ALASKA BUSINESS

BEST BREWERY DENALI AWARD

Midnight Sun Brewing Company

8111 Dimond Hook Drive, Anchorage, AK 9907 907-349-1179 midnightsunbrewing.com

Alaskan Brewing Company 5429 Shaune Drive, Juneau, AK 99801 907-780-5866 alaskanbeer.com

July 2016 | Alaska Business Monthly

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BEST OF ALASKA BUSINESS

BEST DISTILLERY—DENALI AWARD

DENALI

Courtesy of Alaska Distillery

There is an Adventure in Every Bottle, and we are thankful that Alaska has been in the driver’s seat of this journey. Thanks to everyone for their support, and thanks for watching our first successful season of our Reality TV show, Animal Planet’s Alaska Proof. —Toby Foster

Alaska Distillery

1540 N Shoreline Dr., Wasilla, AK 99654 907-382-6250 alaskadistillery.com

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BEST DISTILLERY—ST. ELIAS AWARD

ST. ELIAS Our grain is supplied by farmers in Delta Junction and in Palmer. We do all our distilling and bottling on premise. Come visit our tasting room to see how we do it and taste our products.

Anchorage Distillery, LLC 6310 A St, Anchorage, AK 99518 907-561-2100 anchoragedistillery.com

Alaska Business Monthly | July 2016www.akbizmag.com


TASTING ROOM

DISTILLERY TOURS SOUVENIRS

BEST OF ALASKA BUSINESS

BEST DISTILLERY—FORAKER AWARD

Just a short cab ride from downtown Anchorage!

vodka

gin moonshine whiskey 6310 a street anchorage, ak 99518

Photo by John Hagen/Courtesy of Port Chilkoot Distillery

907-561-2100

anchoragedistillery.com

Port Chilkoot Distillery is Southeast Alaska’s only distillery. Haines locals Heather Shade and Sean Copeland opened the distillery in 2013 in an historical US Army fort bakery building they renovated themselves. The distillery’s focus is on bourbon and rye whiskeys that are fermented, distilled, and barrel-aged onsite. Known best for their international award-winning 50 Fathoms Gin, the couple just released their newest product, Green Siren Absinthe. This small distillery is making Alaska’s first bourbon, rye Port Chilkoot Distillery 34 Blacksmith Street, Haines, AK 99827 whiskey, and absinthe.

FORAKER

907-766-3434 portchilkootdistillery.com

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Photo by Chris Arend/Courtesy of First National Bank Alaska

BEST OF ALASKA BUSINESS

BEST PLACE TO WORK—DENALI AWARD

Local experts like U-Med Branch Manager Kippy Lane offer fellow Alaskans financial solutions to meet their personal and business banking needs.

DENALI

Celebrating 20-, 25-, and even 35-and 40-year employment anniversaries is a regular occurrence at First National Bank Alaska. Why do employees stay so long? Competitive salaries, good benefits and a pleasant working environment—in thirty locations across the Great Land—tell only part of the story. Employees also appreciate that they and some 650 colleagues are united in working toward the worthiest of goals—helping Alaskans reach their dreams. Every day employees provide high quality banking services and contribute to community organizations and non-profits, knowing their efforts will help lead to a better quality of life for their friends and neighbors. Well, they can tell you better themselves:

“What I do at First National makes a difference in my rural community. And as an outdoor enthusiast, I live, work and explore in one of the world’s greatest natural playgrounds.” —Aurora Agee Healy Branch Manager

www.akbizmag.com

“The training and support I receive working at First National not only advanced my career but helped me shape my personal growth.” —Ryan Bargelski North Star Branch Operations Supervisor

“At First National, we give employees the resources and the environment to do the best job possible. The result is a team of local experts who help their fellow Alaskans build homes, send their kids to college and realize business dreams.” —Betsy Lawer, Chair and President

“In a smaller town like Homer, you really get to know the people you serve. I love that feeling of community. And when you’re able to help with solutions to meet their financial challenges … well, that’s money in the bank to me.” —Kerry Thompson Homer Branch Teller

First National Bank Alaska PO Box 100720, Anchorage, AK 99510 907-777-4362 | 800-856-4362 fnbalaska.com

July 2016 | Alaska Business Monthly

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It is an honor to have our exceptional ST. ELIAS team of doctors and staff recognized for their continuous effort to provide dedicated, compassionate orthopedic care to Alaska residents! www.akbizmag.com

Anchorage Fracture & Orthopedic Clinic 3831 Piper St., Suite 220 Anchorage, AK 99508 907-563-3145 afoc.com

July 2016 | Alaska Business Monthly

BEST OF ALASKA BUSINESS

BEST PLACE TO WORK—ST. ELIAS AWARD

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“It is extremely validating to have the support and expertise of the Bristol Bay Development Fund and their amazing staff. As a BBNC shareholder, it feels really good to be a part of BBDF’s investment mix and the first fish processing investment it’s made in the region.” –Izetta Chambers, Naknek Family Fisheries

Investing in Bristol Bay


BBNC staff in front of the Bristol Bay Building. © BBNC

Bristol Bay Native Corporation is honored to be recognized as one of the best places to work. BBNC and its subsidiaries have grown substantially over the past several years and I’m happy we can provide a great work environment for all of our employees. On behalf of BBNC, I want to thank all of our employees for their hard work and dedication to helping BBNC achieve its mission of “Enriching Our Native Way of Life.” —Jason Metrokin, President and CEO Bristol Bay Native Corporation

FORAKER

© BBNC

BBNC encourages and supports its staff to give back to the community. BBNC Staff recently volunteered at Anchorage’s Downtown Soup Kitchen, preparing soup and sandwiches for those in need. BBNC staff getting out to early vote © BBNC

Bristol Bay Native Corporation 111 W 16t Avenue, Suite 400, Anchorage, AK 99501 907-278-3602 | bbnc.net

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BEST OF ALASKA BUSINESS

BEST PLACE TO WORK—FORAKER AWARD

July 2016 | Alaska Business Monthly

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ALASKA NATIVE BUSINESS

Native Business Enriches Southeast Diverse range of economic development By Will Swagel

W

ith more than a million hairs per square inch, sea otter fur is one of the warmest and most luxurious natural materials in the world. Lust for the fur sparked the Russian colonization of maritime Alaska from the Aleutian Islands to the islands of the Southeast panhandle. Overharvest led to the decline of the charismatic sea mammal, and in modern times hunting sea otter was banned. Hunting sea otter is still banned—with an exception. Alaska Natives are allowed to harvest the fur, make it into traditional items, and sell them. Robert Miller of Sitka, a member of the Kiksadi clan of Tlingits, spends hours each week on a specialty sew-

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Alaska Business Monthly | July 2016www.akbizmag.com


Icy Strait Point manages the new cruise ship dock built in partnership between the City of Hoonah and Huna Totem Corporation. In May, the Norwegian Pearl was the first cruise ship to dock at the new floating cruise dock designed by Moffatt & Nichol as part of a design-build team with Turnagain Marine Construction. Photos by Paul Wallis, PE / Courtesy of Moffat & Nichol

www.akbizmag.com

July 2016 | Alaska Business Monthly

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KIC trains welders. Courtesy of KIC

ing machine fashioning gloves, hats, pillows, and blankets that he sells through his company Sea Fur Sewing (seafursewing. com). A small pillow might cost $200 and a five-foot by seven-foot blanket fetches $7,000. Dallas Seavey was wearing a pair of Miller’s sea otter mittens when he crossed the finish line in Nome in March, winning the 2016 Iditarod. On the other side of the world, Nisga’a Data Systems supplies state-of-the-art information technology to customers in Kuwait and has done work on Navy ships. Nisga’a—which means a water bird in Tlingit—is a subsidiary of Juneau’s urban Native corporation Goldbelt, Inc. One of more than a dozen subsidiaries owned by Goldbelt, Nisga’a was established to take advantage of the Small Business Administration’s 8(a) program. This program sets aside a portion of federal contracts that can be bid on only by minority-owned firms to 72

help them get established. The range of businesses owned and operated by Alaska Natives runs the gamut between Miller’s one-man shop in Sitka making traditional items and Goldbelt’s employees deployed all over the world delivering the latest in computer hardware and software.

Sewing Heirlooms

Dallas Seavey wasn’t the only one in the Iditarod wearing garments by Sea Fur Sewing. Further back on the trail, mushers Lance Mackey and DeeDee Jonrowe wore Sea Fur’s garments. Miller says Mackey is one of his biggest supporters. Miller says he is following in the footsteps of his Tlingit grandmother. “She sewed and sold seal skin and sea lion moccasins to tourists back in the day,” he says. Miller’s “day job” is as a biologist for the USDA Forest Service.

He does most of the marketing for Sea Fur products on social media and now has more than ten thousand likes on Facebook. He says he has plans to use more conventional advertising for this Christmas season. Miller started his business slowly at first—tanning his own pelts, for instance, to cut costs. But then, he got a boost from a program of Haa Aaní LLC (Our Land), a subsidiary of Sealaska Corporation, the regional Native corporation for Southeast. Called “Path to Prosperity,” the program has been helping small business owners gain footholds in the markets appropriate for Southeast. Alana Peterson, program director at Haa Aaní, says much of her recent work has been focused on loans to business owners, such as commercial fishermen, for them to buy permits and quota and keep both key elements in local hands. Peterson says her organization has been working on an initiative to support businesses that increase the local supply of food products harvested from Southeast’s vast forests, such as berries and spruce tips. Path to Prosperity has also helped a Sitka resident fund a farm for locally-produced meats. Miller says Haa Aaní arranged for him to have assistance in writing a viable business plan and organizing his business. “They helped me get steered in the right direction and that was a huge asset,” he says. “I was a couple of years into [the business] and I was still trying to figure out prices and costs.” Miller’s success now allows him to buy skinned pelts from more than a half dozen hunters in Southeast villages. He can concentrate on designing new products, sewing, and selling to customers, the majority of whom live in the Lower 48. Miller fits the profile for the kind of entrepreneur being promoted: he uses local knowledge and regional materials to manufacture items and then sells them to people in Alaska and Outside.

Using All the Parts

In May, the Sealaska Corporation announced its minority investment in Independent Packers Corporation (IPC), a Seattle seafood processor. The company says this was the first major investment taken under a carefully-crafted new strategy. “In 2012, Sealaska adopted a new plan [based on] the idea that we should be in business—in terms of location and how [the businesses] are run—in concert with the unique ownership of the company,” says Terry Downes, Sealaska’s chief operating officer. “That [ownership] is twenty-two thousand people whose ancestors subsisted from the ocean for ten thousand years or more.”

Alaska Business Monthly | July 2016www.akbizmag.com


Photos courtesy of Robert Miller/Se Fur

(Left) Four-time Iditarod winner and 2011 Yukon Quest winner Dallas Seavey with two of his team last December. Seavey is wearing Sea Fur Sewing gear. (Right) Four-time Yukon Quest winner and four-time Iditarod winner Lance Mackey wearing Sea Fur Sewing gear.

He says the plan calls for Sealaska to operate in three divisions—land assets, environmental services, and natural foods. Downes says IPC is adept at the efficient use of all parts of the fish, which fits in well with traditional subsistence practices. The investment in IPC will give Southeast entrepreneurs a scaled up market for their products, Downes hopes. “One of the hardest things for entrepreneurs in Southeast, we’ve found, is that it is difficult for them to build channels [to market],” he says. “I think we can encourage the production of products that could piggyback [on IPC’s] channels.” Also in the plan, Downes says, has been the reduction of Sealaska’s timber harvest to levels that can be sustained “for perpetuity, according to our calculations.” Downes says Sealaska’s activities in environmental services consist largely of water monitoring and habitat remediation. He says they have a $130 million business already and are looking to expand it, perhaps by investing in an oceanographic company www.akbizmag.com

in Alaska or elsewhere in the Pacific Northwest “that can understand and mitigate the effects of human activity.”

Expanding in Federal Contracting

Goldbelt, Inc., Juneau’s urban Native corporation, is taking a different tack. Goldbelt owns and operates the Mount Roberts Tramway in Juneau, as well as Goldbelt Transportation, Goldbelt Security, and the Seadrome Marina. But the bulk (92 percent) of Goldbelt’s $220 million in revenue comes from owning companies that gain federal contracts. Goldbelt has fourteen federal contracting subsidiaries in such diverse sectors as construction, information technology, medical services, and direct contract sales. “It’s had its ups and downs,” says Goldbelt (Interim) President and CEO Elliot “Chuck” Wimberly. “But we’ve been with the Small Business Administration’s 8(a) program since 1998. Because of administrative changes, it has become harder to establish 8(a) companies, but with them we have grown significantly.”

“When I came to Goldbelt in 2010 our revenue was about $93 million and we’ve grown over the last six years to where we are today,” he says. In 2010, Goldbelt’s approximately 3,600 shareholders received a $1.50 per share dividend. By 2015, that had risen to $4 per share. The benefits that contracting companies gain from the 8(a) program are not forever. After nine years or upon reaching a certain level of revenue, an 8(a) company “graduates” out of the program. “Out of our fourteen 8(a) companies, four have graduated and are doing well, and we have another three that are within three years of graduation,” says Wimberly. Nisga’a Data Systems is a graduated company that Wimberly says is successfully navigating the bigger pool of competitors. Besides dividends, the corporation provides a variety of programs for shareholders and supports all kinds of cultural activities through contributions to the Goldbelt Heritage Foundation. There is a generous July 2016 | Alaska Business Monthly

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Courtesy of KIC

Some participants of the KIC education and training program working for Vigor Alaska at the Ketchikan Shipyard.

scholarship program for shareholders and their descendants, which can be used for higher or vocational education programs. “If you talked to our shareholders, they look at that opportunity to provide scholarships as probably the most important benefit that Goldbelt provides,” Wimberly says.

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“The Native corporations have a broader mandate than the regular for-profit corporations,” he adds. “A regular corporation would re-invest its earnings in growth and new acquisitions—our focus is to maximize the benefits to shareholders—as well as investments and acquisitions in Alaska and on the East Coast.”

Big Waves in Little Ponds

Some investments made by Native corporations can transform their community’s economy. The village of Hoonah thrived when there was a lot of logging underway on Chichagof Island in the 1980s. After logging declined, village leaders sought another anchor for the local economy.

Alaska Business Monthly | July 2016www.akbizmag.com


The answer to “What’s next?” was answered by Icy Strait Point (ISP), which opened in 2004. A tourist attraction built in a former cannery on the doorstep of Glacier Bay, ISP is expected to host 158,000 visitors this summer, up from 147,000 in 2015. Guests are offered the full range of activities, from bear-viewing and ATV rides to dining and shopping. Many also visit downtown Hoonah, about a mile and a half away, and patronize gift and other local shops. ISP is 100 percent owned by Huna Totem Corporation, Hoonah’s village corporation, which has about 1,300 shareholders. Up to 140 people work at ISP—85 percent local hire and 70 percent are shareholders or their descendants, says Joe Jacobson, Huna Totem’s vice president for business development. Hoonah has about 650 residents. “ISP has grown to the point that we have jobs for almost any qualified shareholder during the season,” Jacobson says. “This is especially true for workers who can work throughout our May to September season. With our new dock and anticipated growth, we expect to have an even greater demand for workers.” Huna Totem also has a growing business providing cultural interpretation aboard cruise ships and at Glacier Bay National Park.

The Huna Tlingits are the original inhabitants of Glacier Bay, Jacobson notes, making the park part of their ancestral homelands. Huna Totem’s Alaska Native Voices is a combination for-profit and nonprofit firm that works in Glacier Bay National Park and across Southeast Alaska. They provide cultural interpretation to cruise lines and their passengers. Up to twenty interpreters make presentations throughout the tourist season. They also offer consulting to other Native groups who wish to develop cultural tourism ventures. Jacobson says both the interpreters and ISP staff are not only employed, but are also learning soft skills that translate well to other jobs. “That’s another of those benefits that’s hard to quantify from a dollars and cents standpoint, but that causes a very noticeable difference in terms of professional development,” says Jacobson. “Being able to give a presentation in a cruise ship auditorium before hundreds of people, and then be available to meet people from all over the world, instills an invaluable sense of self-confidence.” In Ketchikan, a “wildly successful” job training program has been carried out for members of the Ketchikan Indian Community (KIC), the federally-recognized

tribe. Fifteen of those tribal members now work skilled jobs at Vigor Alaska, the firm that operates the Ketchikan Shipyard. The shipyard services Alaska State Ferries and other large vessels. “We partnered with local organizations in order to further the education of tribal members and to provide on-the-job training, which will help in increasing their wages,” says KIC’s Chief Financial Officer Donald Moos. “It’s been successful beyond our wildest dreams.” Overall, KIC has about $30 million under management, says Tribal Administrator Arlene Dilts-Jackson. It has only one truly commercial entity—a 26,000-square-foot rental facility in the tourist section of downtown Ketchikan, with offices and retail shops. KIC’s main economic impact (besides a host of services for tribal members) is probably the up to 150 people they employ at any given time, Dilts-Jackson says. “We’re a small tribe compared to those nationally,” she says, “but we’re certainly a sizeable player in our little pond in Ketchikan.”R

Author and freelancer Will Swagel writes from Sitka.

Only one company puts it all together. From permitting to production, ASRC Energy Services has the right team for the job.

www.asrcenergy.com Engineering l Fabrication & Construction l Pipeline Construction l Marine Services Operations & Maintenance l Response Operations l Exploration, Drilling Support & Geosciences Regulatory & Technical Services l Quality, Health, Safety, Environmental & Training www.akbizmag.com

July 2016 | Alaska Business Monthly

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Construction Roundup: Summer 2016

Photo by Randall Rozier, Bettisworth North

SPECIAL SECTION

Building Alaska

Ryan Middle School steel going up in May.

Compiled by Susan Harrington

S

ummer brings warmer weather and one of the “other” seasons—construction. Last month we included transportation projects from the STIP (Statewide Transportation Improvement Projects) issued by the Alaska Department of Transportation and Public Facilities. This month we’re including vertical construction projects from around the state. While this is a lengthy construction roundup it is by no means complete. It is a sampling of the work being done and incudes about $1 billion dollars in public and private projects that are under construction across Alaska this summer.

Education

General contractor Watterson Construction Company is continuing renovations on the Airport Heights Elementary renova76

tion and addition in Anchorage for the Anchorage School District (ASD). The $16.75 million project began in spring 2015 with projected completion this summer. It was 84 percent complete in May with peak employment expected to be fifty. MCG Architects designed the project. Watterson is also continuing renovations on ASD’s Rabbit Creek Elementary renovation and addition project in Anchorage. The $8.425 million project began last summer and is expected to be complete this summer. Peak employment on the project is forty-five. In May the project was 70 percent complete. Bezek Durst Seiser is the architect. The 56,590-square-foot, $13.6 million Gladys Wood Elementary School replacement project for ASD in Anchorage is being led by MCG Architects—the firm’s roles in the project are architecture, interior design, and educational planner. Cornerstone Gen-

eral Contractors began construction in June, and the multi-year project is scheduled to be completed in August 2017. Subcontractors include CRW Engineering Group (civil engineer, survey), RSA Engineering (mechanical/ electrical engineer), PND Engineers (structural engineer), Shannon & Wilson (geotechnical engineer), Corvus Design (landscape architecture), and Estimations (cost estimator). Kumin is the architect through to the 35 percent bridging documents on the Romig Gym Seismic Repair project, an approximately 9,900-square-foot roof repair job for ASD. The project was in the negotiation phase in June, and the rest of the design will be Design-Build and had not been awarded. Subcontractors (to the 35 percent bridging documents only) include Schneider (structural), EHS (hazardous material abatement design), and HMS (cost estimating). The project has a July anticipated start date.

Alaska Business Monthly | July 2016www.akbizmag.com


James C. Ryan Middle School exterior and interior in Fairbanks. Renderings courtesy of Bettisworth North and Perkins + Will

Kumin is also the architect on the 34,000-square-foot West High School/Romig Middle School IMC Wing Comprehensive Plan and IMC Seismic Repair and Renovation Phase 1 for ASD. Also in the negotiation phase, subcontractors include Schneider (structural), RSA (M&E), EHS (hazardous material abatement design), EEIS (roofing design), and HMS (cost estimating). Phase 1 of the project is scheduled to begin in spring 2017, pending passage of a bond in November 2016. Davis Constructors & Engineers is the general contractor for the $13 million, twostory, 56,775-square-foot Turnagain Elementary School Renewal project for ASD in Anchorage. The architect is Nvision Architecture. The project started May 23 and is expected to be complete August 11, 2017. In Fairbanks, Davis Constructors & Engineers is general contractor as Haskell Davis JV on the UAF Power Plant project owned by the University of Alaska with architect Design Alaska. The project consists of two 140,000 pound-per-hour circulating fluidized bed boilers and a 17 megawatt steam turbine. It will heat the University of www.akbizmag.com

Alaska Fairbanks campus and has a completion date of June 30, 2018. Bettisworth North is the prime architect, landscape architect, and interior designer on the James C. Ryan Middle School for the Fairbanks North Star Borough School District. The $29 million, 60,000-squarefoot replacement/expansion school in Fairbanks was started in April 2015 and slated for completion in July. G2 Construction is the general contractor for the project. Other architect and engineering firms working on the project include BrainSpaces (educational planning and specifications), Perkins + Will (educational planning and design), PDC Inc. (civil engineer, fire protection, mechanical, structural, electrical), Stafford Design Group (kitchen design consultant), HMS, Inc. (cost estimating), NORTECH (environmental/hazardous material engineer), and Shannon & Wilson (geotechnical engineer). Bettisworth North is also the prime architect, landscape architect, and interior designer on the Dena’ina Elementary School in Knik/Wasilla for the Matanuska Susitna Borough School District. The 44,000-square-

foot, $18.4 million school project began in 2013 and is slated for completion in July. FE Contracting is the general contractor. Other architect and engineering firms working on the project include Perkins + Will (educational planning and design), BrainSpaces (educational planning and specifications), HDR Alaska (civil engineer), BBFM (structural engineer), PDC Inc., (mechanical and electrical), Shannon & Wilson (geotechnical engineering), Stafford Design Group (kitchen design consultant), HMS, Inc. (cost estimating), Support Services of Alaska (commissioning agent), Lounsbury & Associates, Inc. (survey), and Greenbusch Group (acoustical engineer and audio-visual systems). Stantec Consulting Services, Inc. designed the Kwethluk K-12 School in Kwethluk for the Lower Kuskokwim School District and is providing full architecture and engineering services. Bethel Services, Inc. is the general contractor on the $32.8 million, 48,500-square-foot project. The school is two floors on driven piles. The project started in fall 2015 and is slated for completion in fall 2017. Construction employment July 2016 | Alaska Business Monthly

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The entrance to the Dena’ina Elementary School in Knik/Wasilla.

Photo by Jon Steele, Bettisworth North

Rendering courtesy of Bettisworth North and Perkins + Will

Dena’ina Elementary School construction site.

is expected to range from fifteen to sixty. Stantec designed the Andrew Demoski K-12 School Renovation in Nulato for the Yukon Koyukuk School District and is providing full architecture and engineering services. UNIT Company is the general contractor on the $7.2 million, 22,557-squarefoot project. The project started May 15 this year and is slated for completion in fall 2017. Watterson Construction Company is the general contractor on the $9.5 million AVTEC Renovation/Addition project in Seward. The project was 95 percent complete in late May with closeout in progress. Bettisworth North is the architect. Kumin is the architect for the Prince William Sound College Exterior Renovation project in Valdez. Wolverine Supply, Inc. is the general contractor on the 38,806-square-foot project. Others in-

Anchorage Fire Station No. 9 is slated for completion this summer. Rendering courtesy of Bettisworth North

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Alaska Business Monthly | July 2016www.akbizmag.com


Public

Bettisworth North is the prime architect, landscape architect, and interior designer for the Municipality of Anchorage Fire Station No. 9, a $6.4 million project started in 2014 and slated for completion in August. Dokoozian is the general contractor. Other architects and engineering firms include TC Architecture (fire station planning), DOWL (civil engineers, planning, and public involvement), HMS (cost estimating), R&M Consultants (geotechnical and structural engineer), and RSA Engineering (mechanical/electrical/plumbing engineer). Mass Excavation, Inc. is the general contractor on three Municipality of Anchorage projects: the $6.9 million Merrill Field Taxiway Q project started in May and is expected to be complete in October; the $454,680 South Anchorage Sports Park, engineering by Boutet Company, started last October and was completed in May; and the $425,537 Chugiak Bike Path project. Bettisworth North is the prime landscape architect for the Municipality of Anchorage, Parks & Recreation 26.74 acre Muldoon Town Square Park. Other architect and engineering firms include R&M Consultants (civil engineer, survey, planning, public involvement, and permitting) and RSA Engineering (electrical/lighting engineer). The project start date was 2015. The general contractor, estimated cost, and completion date were not yet set in late May for the phased construction project. The playground, pavilion, and access and infrastructure improvements are to begin this summer. ARCADIS is working the FedEx Hangar Mechanical and Electrical Upgrade Design

Build project at Ted Stevens Anchorage International Airport. UNIT Company is the design-builder on the 80,000-square-foot, $2.7 million project that is owned by the Alaska Industrial Development and Export Authority. Architecture and engineering firms on the project include MCG Architects and Coffman Engineers. Subcontractors include Quality Electric, Norcast Mechanical, Inc., Chinook Fire Protection LLC, and H&K Sheetmetal Fabricators, Inc. The project started in April and is slated for completion in September.

Watterson Construction Company is the general contractor the Fairbanks North Star Borough Birch Hill Maintenance Facility. Bettisworth North is the architect on the $1 million project that started this spring and is scheduled for completion this fall. Peak employment is set to be eight. Bettisworth North is the prime architect, landscape architect, and interior designer on the Girdwood Fire Station No. 41 Renovation and Expansion project owned by the Municipality of Anchorage and started in spring

Photo by Jessica Boyer, Bettisworth North

volved in the project include Coffman Engineers (structural, M&E), EHS (hazardous materials abatement design), and HMS (cost estimating). The project is expected to start in July and finish in October.

Anchorage Fire Station No. 9 at Lake Otis Parkway and DeArmoun Road. www.akbizmag.com

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The Anchorage Museum two story expansion going up in May by Davis Constructors and Engineers. Courtesy of Davis Constructors and Engineers

2015. Other architect and engineering firms include TCA Architecture (fire station planner), DOWL (civil engineering/planning), RSA Engineering (mechanical/electrical engineer), Reid Middleton (structural engineer), and HMS (cost estimator). General contractor Wirtanen Commercial is slated to complete the $4.1 million, 12,000-square-foot (addition and renovation) project in May 2017.

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Kumin is the architect for Alaska Court System Upgrades in Juneau, Sitka, and Ketchikan. The project is in process. Project size and scope are to be determined. Other firms working on the project include RSA Engineering (mechanical, electrical) and EHS Alaska (hazardous material abatement design). Stantec Consulting Services, Inc. provided all engineering services on the North

Pole Lift Station Rehabilitation Phase 3 for the City of North Pole. Central Environmental, Inc. is the general contractor on the $2.2 million project. Started in May 2016, it is expected to be completed in October. Bettisworth North is the prime architect, landscape architect, interior designer, and energy programs manager for the $12.8 million, 23,370-square-foot Skagway Public

Alaska Business Monthly | July 2016www.akbizmag.com


Rendering courtesy of Bettisworth North

Muldoon Town Square Park is a multi-year, phased project scheduled to begin construction this summer at Muldoon and DeBarr in Anchorage.

Rendering courtesy of Bettisworth North

Safety project owned by the Municipality of Skagway. Other architect and engineering firms include TCA Architects (fire station planning), Integrus Architecture (security consultant), R&M Engineering Juneau (civil engineer), HZA Engineering Consultants (mechanical/electrical engineer), BBFM Engineers (structural engineer), and HMS (cost estimator). Other client consultants were ProComm (radio and E-911), Tongass Veterinary Service, and Alaska Technical Solutions (IT contractor). Dawson Construction is the general contractor. Subcontractors include Mantech Mechanical and Megawatt Electric. Planning started in 2011 and the project is slated for completion in November. ARCADIS is leading the Valdez New Boat Harbor project for the City of Valdez. The $82.6 million project includes R&M Consulting Engineers (engineering), general contractor Harris Sand & Gravel (Phase 1 Upland), and subcontractors Advancing Blasting Services (drilling and blasting bedrock), Puffin Electric, Inc. (electrical),

The Skagway Public Safety project is slated for completion this November. www.akbizmag.com

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Alaska Native Tribal Health Consortium Health Communities Building infusion bays. Courtesy of Bettisworth North

Wrangell Mountain Technical Services (surveying, project engineer), Zastro Enterprises, Inc. (concrete), and independent truck drivers for hauling overburden and blasted material. The Phase 1 Uplands portion of the project started April 16, 2015, and has a slated completion date of November 25 for the Phase 1 Uplands Civil Work. Cornerstone General Contractors is the general contractor on the Wasilla Public Library owned by the City of Wasilla. The 24,585-square-foot, $12 million project is a single-story building with outdoor features such as covered patios and an amphitheater. ECI/Hyer Architects is the primary architect. The start date was May 1 last year with twenty-four men and women on site for peak employment. Cornerstone is completing foundations, sidings, doors, and finish hardware. Subcontractors include Dirtworks, Inc. (civil), Alaska Enviroscape (landscaper), 3D Concrete (concrete flat work), Independent Steel (structural steel erection), Pac West (casework), Alaska Glazing (unitized curtain wall install and interior glass), Goliath (metal framing), Elite Acoutstics (ceiling), Saloka (paint, tape), McKinley Fire (fire protection), Southcentral Mechanical (plumbing), Noble Mechanical (HVAC), and Sumner Electric (electrical). The project is expected to be complete by August 1.

Healthcare

MCG Architects will do the architecture and interior design on the Alaska Native 82

Tribal Health Consortium ANTHC Education & Training Center in Anchorage. The three-story, 53,000-square-foot design work began in March, construction is scheduled to start in November, and completion is slated for 2017. Other firms on the project include Rodney P. Kinney Associates (contract manager, civil engineer, survey), AMC Engineers (mechanical/electrical engineer, fire protection), PND Engineers (structural engineer), Corvus Design (landscape architecture), and Estimations (cost estimator). Bettisworth North is the prime architect, interior designer, and landscape architect for the Alaska Native Tribal Health Consortium ANTHC Healthy Communities Building Infusion Center and Oncology Center in Anchorage. Other architect and engineering firms include HZA Engineering Consultants (mechanical/electrical engineer) and BBFM Engineers (structural engineer). Neeser Construction is the general contractor on the 40,000-square-foot project that was started in 2014 and is slated for completion this summer. Kumin is the architect for the Southcentral Foundation Children’s Dental Clinic, Parking Garage, and Pedestrian Skybridge project on the Alaska Native Medical Center Campus in Anchorage. The project includes a 110,000-square-foot medical office building (five stories with basement) and a 499 stall parking garage (six levels with basement). Neeser Construction is the prime contractor for this design/build project. The design is in process and was

awarded in February 2015. Other firms include AMC Engineers (mechanical, electrical, plumbing), EBSC Engineering (civil), Reid Middleton (structural), and Earthscape (landscape architect). The anticipated completion date is June 2018. Davis Constructors & Engineers is the general contractor on the Providence Emergency Department project in Anchorage, which consists of six phases of remodeling. Architects Alaska is the architect on the project, which was underway in June. Kumin is the architect for the Stepping Stones Residential Treatment Facility Expansion in Anchorage. Other firms include Coffman Engineers (civil, structural, mechanical, electrical, survey), Faulkenberry & Associations (programming and design consultant), and HMS (cost estimating). Work is scheduled to begin in early July. In Bethel, Bettisworth North and ZGF are prime architect, landscape architect, and interior designer for the Yukon Kuskokwim Health Corporation Dr. Paul John Calricaraq Clinic and Hospital Renovation project, a $170 million, a seven-year undertaking begun in 2014 and expected to be completed in 2021. The project is still under design and pre-construction planning. The general contractor is Davis Constructors and Engineers with SWK, Inc. The clinic is 170,000 square feet and the hospital renovations comprise 88,000 square feet Other architect and engineering firms include ZGF Architects (medical planning and design), Jones and

Alaska Business Monthly | July 2016www.akbizmag.com


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Jones (cultural designer), Arcadis (project manager), Innova Group (medical planner), CRW Engineering Group (civil engineer, surveying), BBFM Engineers (structural engineer), Ted Jacob Engineering Group (medical mechanical/electrical/plumbing engineer), RSA Engineering: (mechanical/electrical engineer), Stantec (low voltage electrical engineer), Morrison Hershfield (exterior envelope consultant), Daly-Standlee & Associates (acoustics), Arctic Food Service Design (food service/kitchen design), Rowan Williams Davies & Irwin (snow and wind drift specialists), and HMS Inc. (cost estimators). Bettisworth North is the prime architect, landscape architect, and interior designer on

the 75,000-square-foot Fairbanks Memorial Hospital Surgery Addition project owned by the Greater Fairbanks Community Hospital Foundation. Other architects and engineering firms working on the project include ZGF Architects (medical planning and hospital design), PDC Inc. Engineers (electrical, structural, civil engineer), Design Alaska (mechanical engineer), Affiliated Engineers (medical mechanical, electrical, plumbing engineer), Shannon & Wilson (geotechnical engineer), Stutzmann Engineering Associates (surveying), Estimations (cost estimating), and Anderson Krygier (graphic design/ wayfinding). General contractor GHEMM also performed construction management

on the project started in April 2015. Planned completion is April 30, 2017. The project has a $55 million construction budget, $88 million total with equipment. Kumin is the prime contractor and architect for the City and Borough of Juneau Bartlett Regional Hospital Operating Rooms Remodel in Juneau. Design began in May and the project size is to be determined based on the design solution selected. Other firms working on the project include Rich Conneen (local co-designer), Design Studio Blue (healthcare interior design), Radixos (medical equipment planner), AMC Engineers (mechanical, electrical, plumbing), PND Juneau (structural and civil), EHS Alaska (hazardous materials abatement design), Earthscape (landscape architect), Chilkat (surveying), Wilson Engineering (construction administration), and HMS (cost estimating). Completion is scheduled for spring/summer 2019. Bettisworth North is the prime architect, landscape architect, interior designer, and energy programs manager for the Unalakleet Elders Assisted Living Facility owned by the Native Village of Unalakleet. Other architect and engineering firms include HMS (cost estimator), Golder Associates (geotechnical engineer), RSA Engineering (mechanical/electrical engineer), Bristol Engineering (civil engineer/surveyor), and Stafford Design Group (food service/kitchen consultant). The $5.7 million, 10,500-square-foot project is still in design. Planning was started in 2013 and the design was started in 2015. The completion date is pending construction funding.

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MCG Architects is providing architecture and interior design services to the US Air Force for the F-35A Flight Simulator Facility at Eielson AFB near Fairbanks. MCG began work in June on the $25.8 million, 32,342-square-foot project. Subcontractors include R&M Consultants (civil engineer), PDC Inc. Engineers (mechanical/electrical engineer), Schneider Structural Engineers (structural engineer), Corvus Design (landscape architecture), Estimations (cost estimator), HDR (F-35A consultant), and Jensen Hughes (fire protection). Construction is anticipated to begin in August or September this year with completion slated for October 2018. Watterson Construction Company expects to complete the US Army Corps of Engineers Mechanical/Electrical Building at Fort Greely this summer. The $46 million project began in summer 2014. The project was 94 percent complete in May with the building already complete and site work expected to be complete in July. Peak employment was seventy. PDC Inc. Engineers performed all disciplines of engineering.

Alaska Business Monthly | July 2016www.akbizmag.com


Watterson Construction Company began a $2.1 million Doyon Utilities project for Doyon Limited at Fort Wainwright this spring with completion expected this summer. The project was 15 percent complete in May; peak employment is expected to be ten. Design Alaska is the architect.

Commercial and Nonprofit

Spark Design is the architect and interior designer on the C Street and 104th Avenue Development project in South Anchorage consisting of two one-story buildings; one at 317 W 104th Avenue (8,450 square feet) and the other at 345 W 104th Avenue (9,438 square feet). JL Properties is the developer and H. Watt & Scott is the general contractor. Project work started in July 2015 and completion is slated for August. Other firms working on the project include DOWL (civil engineering), Northwest Landscape (landscape architect), Schneider Structural Engineers (structural engineering), T3 Alaska, LLC (Mechanical and Electrical Engineering). On the other end of town, Spark is the architect and interior designer on Cook Inlet Housing Authority’s Grass Creek North, Phase 1 project at the northwest corner of Muldoon Road and Creekside Center Drive. Ten townhouse style buildings (thirty-two

new housing units) and one three-story multi-family housing building (twenty new housing units) are under construction in this $18 million project started in July 15 that is expected to be completed in August. Neeser Construction, Inc. is the general contractor on this innovative project. Other firms working on the project include DOWL (civil engineering and landscape architect), Reid Middleton, Inc. (structural engineer), T3 Alaska, LLC (mechanical and electrical engineering), LIME Solar (alternative energy consultant), Energy Smart Alaska (energy consultant), Horizons, LLC (energy consultant) MCG Architects is designing an Alaska Airlines Hangar in Anchorage for Alaska Airlines, Inc. The hangar will be 105,000 to 120,000 square feet at a cost of $30 million to $45 million. MCG began work on the project in February and completion is planned for 2018. Subcontractors include CRW Engineering Group (civil engineer, survey), AMC Engineers (mechanical/electrical engineer, commissioning), Schneider Structural Engineers (structural engineer), Shannon & Wilson (geotechnical engineer), Coffman Engineers (fire protection), Corvus Design (landscape architecture), Jacobsen Daniels (aviation planner), and Estimations (cost estimator). Stantec Consulting Services, Inc. provided all architecture and engineering servic-

es to the Body Renew Alaska Tennant Improvement project on Grass Creek Road in Anchorage. The 14,000-square-foot project includes two floors, locker rooms, childcare, cardio and weight rooms, and four large group workout rooms. The owner is Brian Horschel and the general contractor is Alborn Construction, Inc. Work was to start in June and be completed in September. Peak employment expected is twenty. Watterson Construction Company is the general contractor for the 60,000-squarefoot Kendall Audi Volkswagen Porsche project at Dowling and Old Seward in Anchorage. The architect for the project is MCG Architects and the design was in progress in late May with construction expected to start this summer and be complete in fall 2017. Peak employment is estimated at forty. Bettisworth North is the prime architect, landscape architect, and interior designer on the Tudor Park Office Building Renovation project owned by PTP Management, Inc. Work started in 2014 and the $4 million project is expected to be completed this year. Other architect and engineering firms involved in the project include AMC Engineers (mechanical/electrical engineer), BBFM Engineers (structural engineer), and DOWL (civil engineer/survey). Excel Construction is the general contractor and subcontractors include

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Tudor Park Office Building renovations are expected to be completed this year. Rendering courtesy of Bettisworth North

General Mechanical, Statewide Door & Glass, Norcoast Mechanical, Alcan Electrical & Engineering, Haakenson Electric, Chinook Fire Protection, Otis Elevator, Designer Carpets, and Borealis Construction. NECA and IBEW Local 1457 are also at work on the project. Davis Constructors & Engineers is the general contractor for the Anchorage Museum Expansion, a two-story, 31,067-squarefoot project for the Anchorage Museum Association. The architect is MCG Architects. The project started February 1 and is slated for completion by June 1, 2017.

Watterson Construction Company is the general contractor for the Alaska Zoo Polar Bear Exhibit in Anchorage. The $2.1 million project started in summer 2015 and was 80 percent complete in May. It is scheduled for completion this summer with peak employment at fifteen. Kumin is the architect for the Cook Inlet Tribal Council Long-Range Maintenance Plan for the CITC HQ Building and Chanlyut in Anchorage. Other firms working on the two buildings include Bristol Engineering Services Corporation (prime/civil,

structural), PDC Inc. Engineers (electrical, fire protection), and Support Services of Alaska (mechanical, plumbing; retro-commissioning). The project is in process.

Other Projects

There are many other projects under construction in Anchorage and elsewhere around the state that contractors are busy building this summer. We plan to provide details about some of those other projects in the next Building Alaska special section scheduled for September.  R

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business

P

rofile

Celebrating 40 Years of Community Building in Alaska

Interior Alaska residents visit the Morris Thompson Cultural and Visitor Center, one of Bettisworth North’s design collaborations and a landmark Fairbanks community building.

F

orty years ago, a young Fairbanks man started an architecture business. Today, Bettisworth North honors a successful legacy and looks to its bright future. “Our 40th anniversary celebration is about continuing to do work that matters for the good of our communities,” says Marketing Director Leah Boltz. Founder Charles “CB” Bettisworth says: “We have had a great opportunity to work with wonderful partners and clients across the state. All of that was done in an effort to make our communities a better place to live, work and recreate.” President and Principal Architect Roy Rountree is proud to take Bettisworth North into the future. “CB’s passion, mentorship and dedication have created a solid foundation, and I have a vested interest in our work here and how we move forward,” says Rountree, who was born and raised in Juneau. “It is important that we build on this foundation to help make Alaska a better place.” In that vein, Bettisworth North is launching a “40 for 40” giving campaign to share its gratitude. The campaign reinforces its community-building mission and legacy of Alaska work.

MAKING A DIFFERENCE Founded in August 1976, Bettisworth North provides architecture, planning, landscape architecture, interior design and energy management services statewide, with 37 employees and offices in Anchorage and Fairbanks. The firm emphasizes energy efficiency and environmentally—and culturally—responsive designs through large-scale civic, academic, commercial, industrial, transportation, recreation, healthcare and housing projects. Recently, Bettisworth North won the A4LE Len Mackler Award for design excellence for George H. Gilson Middle School in Valdez. While this award is special, Bettisworth North is motivated by a greater purpose: making a difference.

The company values doing good and helping Alaskans. “We create long-lasting relationships and friendships with our clients and community members,” says Tracy Vanairsdale, Principal Architect and Manager of the Fairbanks office. “Learning from others and helping create solutions together is what I truly enjoy.” As such, Bettisworth North collaboratively involves clients in design to ensure their goals are understood and achieved. “The projects are truly our clients’; they’re not ours,” Vanairsdale says. “Their vision and input are integral.” EMPLOYEES DRIVE SUCCESS Bettisworth North also distinguishes itself by creating valuable community connections. This, along with its employees’ expertise and hard work, fuel the firm’s success. “We strive to always elevate and enhance design standards and ethics within the profession in Alaska, without ego,” Bettisworth says. “Because of that, we’ve built a great reputation, and that reputation has attracted exceptional employees.” Bettisworth adds: “I always wanted to keep investing in the firm. That resulted in adding value in services and processes, while making sure we had projects that were challenging and fun.” The focus on employees, mentorship and company culture hasn’t changed. “We continually look to hire the best people, and we challenge and empower them to do great work,” says Mark Kimerer, Principal and Landscape Architect. “What comes out of that formula is people who are very engaged in their work, dedicated and passionate.” Bettisworth North has progressively evolved to meet Alaska’s changing needs. “We will continue the legacy of helping our clients be the best they can possibly be,” Rountree says. “We are here to help Alaska grow and be prosperous into the future.”

Roy Rountree, President I Anchorage 907-561-5780 I Fairbanks 907-456-5780 I bettisworthnorth.com –

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SPECIAL SECTION

Building Alaska

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Alaska Business Monthly | July 2016www.akbizmag.com


Z.J. Loussac Library Renovation Expanding functionality for the Anchorage community By Tasha Anderson

T

he Z.J. Loussac Library in Anchorage is getting a significant facelift: according to Library Director Mary Jo Torgeson, there are multiple goals of the renovation work scheduled to be completed in spring 2017, essentially “to create library that is safe, efficient, and welcoming.” The safety issue mostly revolves around the old entry steps and plaza, which Torgeson says were in disrepair and unsafe. Efficiencies will be improved by moving Patron Services and Technical Services to the first floor “so people can more easily find their way around the building and so that materials are moved more efficiently,” Torgeson says, as well as by creating a new indoor bookdrop.

Construction at Z.J. Loussac Library, June 2016. Photo by Tasha Anderson for Alaska Business Monthly

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A close-up view of the library renovation. Photo by Tasha Anderson for Alaska Business Monthly

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Alaska Business Monthly | July 2016www.akbizmag.com


She says the estimated cost of the Loussac renovations is $15.5 million, with $15 million of state funds, $250,000 coming from the Anchorage Library Foundation, and $280,000 from the library bequest. Pinnacle Construction, Inc. is the contractor for the project, which was designed by RIM Architects.

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The work being done includes

 An elevator that has access to all four floors (previously elevators did not access all levels), making the Library “more welcoming and accessible,” according to Torgeson, as well as allowing the public to use the meeting spaces on the fourth floor even when the Library is closed

 A new pedestrian plaza to replace the “unsafe, crumbling stairs and terrace”  Renovating what was previously Circulation on the second floor to become “Anchorage’s Living Room,” an open, flexible space  A new entrance on the second floor to the Youth Section that will help draw families

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 Additional space on the third floor providing access to computers and WiFi; a new glass-enclosed entryway, three stories tall, that will contain an expanded café and be “open to the sun and the Chugach Mountains, giving people the opportunity to experience our fabulous surroundings”

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Construction work at the Z.J. Loussac Library in Anchorage will continue through spring 2017. Photo by Tasha Anderson for Alaska Business Monthly

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Photo by Tasha Anderson for Alaska Business Monthly

A crane at work on the Z.J. Loussac Library; the “unsafe” former entry steps and plaza had already been demolished.

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“As part of the Master Plan, people said they wanted to bring the outside in. Our new living room will create a comfortable space to read new materials.”

—Mary Jo Torgeson, Library Director

into an area “designed specifically to help young people build a good foundation of learning”  Updates to seismic bracing on the first and second floors  Updates to a thirty-year-old heating/ cooling systems  Closing off Sharrock Way

Many Improvements

The Loussac Library serves the Anchorage and surrounding communities in a variety of ways, and this renovation allows the library to be able to continue to improve services. Many groups use the library as a meeting space, including government, business, and community organizations. Torgeson explains that, as “libraries today rely heavily on meeting room space,” adding smaller meeting rooms ideal for groups

of students or professionals to work on projects and improving the larger meeting area will be a direct benefit to the community. Also, what spaces the library does have are being designed for maximum flexibility to serve as many needs as possible. More wiring is being added to the renovated areas, and there won’t be any built-in furniture. “Flexibility is key for today’s library,” she says. The organization of the library is being improved; for instance, the entire adult collection is now on the third floor and all of the media will be housed on the second floor. Also, adding new check-out stations on the first floor will allow guests to “grab their holds, check out quickly, and be out the door in five minutes.” Behind the scenes, the library is installing infrastructure for automated handling, where library materials are checked in on a conveyor belt and roughly sorted, which, Torgeson says, saves “employees time to do what is more

important: interaction and helping the public.” Access to technology and the internet is becoming more and more of a necessity; part of this project is to “update our technology and vastly improve our broadband. More and more people bring their down devices—they can use them for as long as they want in the library, and can even print from their own devices by downloading an app,” Torgeson says. Such improvements allow the library to continue to fulfil its vital role of granting access to resources and information to all community members. Aesthetic improvements may not seem as vital as many of the other functional work being done, but people naturally are drawn to spaces in which they feel comfortable. “As part of the Master Plan, people said they wanted to bring the outside in,” Torgeson says. The three floors of windows will allow light in, as well as provide a beautiful view of the Chugach Mountains to library patrons. “Our new living room will create a comfortable space to read new materials,” she says, and all of the renovated spaces will be open and light-filled.  R Tasha Anderson is the Associate Editor for Alaska Business Monthly.

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SPECIAL SECTION

Building Alaska

Construction in Interior Alaska ‘Kind of a slow start’ By Julie Stricker

As a couple of large construction projects in Fairbanks progress toward their expected completions this year and next, summer 2016 is looking very quiet. But it may be the calm before the storm. Slow Start

“Except for the projects that were started last fall, it’s kind of a slow start because of concerns over the economy,” says Clem Clooten with the city of Fairbanks Building Department. With low oil prices putting a huge dent in the state budget, the University of Alaska bracing for large cuts, and the Alaska Legislature in early June still without a plan to close those gaps, there’s a lot of uncertainty in the industry. Despite that Clooten is expecting a busy building season as summer progresses. “We’re just finishing up the Food Factory’s new restaurant,” he says, ticking off current large projects. “In a couple of weeks the new Ryan Middle School will be complete, and we’ll have a new sixty-unit surgery wing for Fairbanks Memorial Hospital.” The surgery unit is part of an $88 million expansion project at the hospital that has 94

been in the works for more than a decade. It includes a 95,000-square-foot addition with seven surgical units equipped with the latest high-tech equipment. On the University of Alaska Fairbanks campus, work is progressing on a 17 megawatt heat and power plant to replace the previous plant, which was designed in the 1930s and feared to be on the brink of failure. Under Senate Bill 218, the Legislature and former Governor Sean Parnell provided the university with $157.5 million of revenue bond issuance authority to pay for the project. It is scheduled to be completed in 2018.

New Projects

Elsewhere in Fairbanks, a new SpringHill Suites hotel is going up on the northeast side of town and a twenty-four-unit-apartment complex

Alaska Business Monthly | July 2016www.akbizmag.com


is slated for south Fairbanks, Clooten says. “I would expect some new projects coming this fall on new foundations and stuff like that,” he says. Stacy Wasinger, a planner with the Fairbanks North Star Borough, say a lot of single-family residences are being built around the region, but nothing out of the ordinary.

Decline in Spending

The 2016 annual construction spending forecast written by Scott Goldsmith and Pamela Craves, Institute of Social and Economic Research, University of Alaska Anchorage, for the Construction Industry Progress Fund and the Associated General Contractors of Alaska, shows an 18 percent decline in construction spending statewide from 2015. Overall, the report predicts a 25 percent decline in the oil and gas sector; an 11 percent decline in general construction spending; private spending will fall 24 percent; and public spending will decline 6 percent. “The decline in construction spending in Alaska in 2016 can be traced directly to the precipitous drop in the price of oil over the last eighteen months,” the report states.

Defense Spending Up

On a positive note, Interior Alaska stands to benefit from increased military spending in 2016. The Department of Defense announced in April that two squadrons of F-35 Lightning II Joint Striker Fighter jets will be housed at Eielson Air Force Base, bringing fifty-four aircraft and hundreds of military personnel, as well as thousands of civilians and dependents, to the area. They are expected to arrive in 2020. In the meantime, there’s a lot of work to be done. Nearly half a billion dollars in associated construction spending ($453.4 million) and the creation of 2,339 jobs is expected with the arrival of the F-35s, beginning this fall with a six-bay flight simulator building and upgrades to the Eielson central heat and power plant. About $38 million in construction projects is expected in 2016, including Corps of Engineers sustainment, restoration, and modernization projects at Eielson. That will ramp up dramatically in 2017, when $296 million in construction is planned. Base officials say that 2018 could see another $200 million in spending. That is all defense spending and doesn’t include quality-of-life projects such as a larger base exchange, a possible brewery, or other small businesses. Although the long-range effects of the F-35 squadrons’ arrival have yet to be quantified, the Greater Fairbanks Chamber of Commerce says Eielson construcwww.akbizmag.com

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tion and additional civilians and military dependents could mean $1.3 billion in annual revenue for the Fairbanks North Star Borough.

More Missiles

Fort Greely in Delta Junction and Clear Air Force Station, located between Fairbanks and Healy off the Richardson Highway, are in line for a $1 billion missile defense expansion. The project will add fourteen interceptor missiles to Fort Greely over the next several years and build a long-range radar system at Clear that would help the missile defense system better target incom-

ing warheads, according to the US Department of Defense. The system, called the Long Range Discrimination Radar, is expected to begin operations in 2020. The radar would improve the Ballistic Missile Defensive System sites’ ability to tell the difference between live missiles and countermeasures, according to a news release from the Defense Department. However, a spokeswoman says no work was planned at Clear in 2016. “The [Missile Defense Agency] has no military construction activities scheduled to begin during the 2016 summer construction season,” says Debra Christman, Mis-

sile Defense Agency public affairs officer, in an email. “The Missile Defense Agency will begin Long-Range Discrimination Radar construction activities in Fiscal Year 2017 and continue through FY20, with the site being operational by 2020.”

Road Work

Transportation spending in Interior Alaska is projected to remain steady from 2015. The construction contract amount for 2016 is $312 million for fifty-one projects in twenty-three communities, according to Alaska Department of Transportation and Public Facilities Northern Region public information officer Meadow Bailey. One of the largest projects is the continued reconstruction of the Dalton Highway between Mileposts 379 and 397 on the North Slope. That region was hit by severe flooding in spring 2015, closing the road for weeks. The project aims to raise the level of the road, replace culverts, and surface the road, a vital supply link for Alaska’s North Slope oil fields. Other projects include replacing bridges on the Edgerton, Denali, and Richardson highways and on the Tok Cutoff. The department also plans to complete the Road to Tanana project, which was started in 2014. Cruz Construction is the contractor for the $11 million project. The project includes 33.4 miles of single-lane gravel road from Tofty Road to the banks of the Yukon River, about 6 miles from the city of Tanana. Another project aims to stabilize a rock slope in the Nenana Canyon along the Parks Highway just north of the Denali National Park and Preserve entrance. The area, at Milepost 239, is prone to rockslides, and studies determined the slope needs to be removed. Three northern region airports are in line for major upgrades this summer. Brice, Inc. has a $20 million contract to relocate the airport at Pilot Station, a community of about six hundred residents on the Yukon River. Ridge Contracting, Inc. has a $21 million contract to widen, rehabilitate, and extend the main runway at Ambler, a community of 250 on the Kobuk River in northwest Alaska. The contract includes the construction a new snow removal equipment building and demolition of the old one, as well as general infrastructure upgrades. Shishmaref, located on an island in the Chukchi Sea five miles off the mainland cost, is due to get $6 million in improvements to its runway and infrastructure. Knik Construction is the contractor.  R Julie Stricker is a journalist living near Fairbanks.

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ARCADIS Project and Construction Management

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s Alaska’s leading project and construction management services firm, Arcadis has partnered with owners to manage some of the largest, most complex and challenging construction projects in the state. They include Ted Stevens Anchorage International Airport Terminal Redevelopment, Anchorage Museum Expansion, Dena’ina Civic and Convention Center, Goose Creek Correctional Center, Valdez Middle School, North Slope Borough Water Wastewater Treatment Plant, MEA’s Eklutna Generation Plant, Tanana Chiefs Conference’s Chief Andrew Isaac Health Center, Dena’ina Wellness Center, Kodiak Launch Complex, Fairbanks International Airport Terminal Redevelopment and Alaska SeaLife Center. Arcadis is currently working with the Yukon-Kuskokwim Health Corporation on its $300 million health care clinic and the City of Valdez on its $82 million New Boat Harbor (shown below).

Senior Project Manager, Ron Rozak, on the Valdez New Boat Harbor construction site.

Arcadis’ project/construction management services encompass all the activities needed to plan, design, construct and commission construction projects. Essentially, its project managers become an extension of the client’s management team, providing the coordination, strategic planning and management needed to control project cost, schedule and quality. “We have 35 years of experience in Alaska design and construction, and we enjoy working collaboratively with owners to guide them through each step of the building process,” says Senior Project Manager, Kent Crandall, AIA. A key area for Arcadis is “staff augmentation” project management services, including request for proposal/contract development, public involvement, project controls support, construction administration support and claims management. These services are ideal for clients needing to supplement their in-house management for large projects. “We integrate our staff directly into the client’s organization to provide the additional expertise and resource needed to deliver successful projects,” Crandall says. –

PA I D

Representing Owners Throughout the Design and Construction Process Arcadis’ core service offering in Alaska is its owner representative project/construction management services. “We provide a full palate of services, from planning, contracting, design and construction, as well as owner move-in and close out,” Crandall says. “We also pride ourselves on excellence in stakeholder communication.” “We like to get involved early and help the owner formulate their program, select their site, if needed, and establish the budget and scope for the project,” Crandall says. “Often, this means sitting down with clients, asking questions, listening and understanding their objectives.” The company strives to help owners successfully deliver their projects and also looks to celebrate project milestones along the way. “If you can do things to make it exciting, interesting and fun, people will naturally give it more attention, which fosters success and teamwork,” he explains. Local Expertise An outgrowth of Rise Alaska, Arcadis prides itself in its Alaska roots and highly-skilled local staff. It has 22 employees in Anchorage, Fairbanks and Valdez. “We are almost all exclusively from Alaska and have been managing projects across the state for decades,” Crandall says. “We understand the climate issues, economics, regionalism and politics.” Additionally, Arcadis’ employees possess a genuine concern for Alaska’s well-being. Crandall explains: “We are Alaskans who care about our state and want to see it thrive.” Along with its strong local presence, Arcadis has the global resources to bring additional expertise to Alaska projects if needed. Regardless of the project, Arcadis has one principal goal: “We want to continue to be good members of the community and help owners be successful in delivery of their design and construction projects,” Crandall says.

www.arcadis.com

880 H Street, Suite 101 Anchorage, Alaska 99501 (907) 276-8095

A DV E R T I SE M E N T

410 2nd Ave., Suite 206 Fairbanks, Alaska 99701 (907) 374-6938


SPECIAL SECTION

Building Alaska

Retail Development in the Valley Signs of growth in Palmer, Wasilla, and Big Lake By Rindi White

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s the retail hub of Alaska, Southcentral is generally humming with new commercial construction. In the past few years, whole retail complexes have been added in Anchorage and Mat-Su. While things are a little slower this year, particularly in Anchorage, retail construction is still happening in the Valley. The City of Palmer is home to one of the largest new retail construction projects underway this season. Fred Meyer is building a new store there, after having outgrown the 66,000-square-foot store currently in Palmer’s downtown district. At 137,000 square feet, the new store is nearly double the size of the existing store, though it won’t be as large as the neighboring nearly 169,000-square-foot Wasilla Fred Meyer. But it will carry most of the same items available at that store: clothing, home furnishings, an expanded grocery and organic foods space, and other general merchandise, Fred Meyer Spokeswoman Melinda Merrill says. It’s expected to be open in March 2017 and is expected to employ between 240 and 250 employees, 60 to 70 more than work at the existing store, Merrill says. It will be located across the Glenn Highway from its current location, on the site that was once the Carrs Mall, a long-defunct mall that used to house the Carrs/Safeway store. Merrill says Fred Meyer is investing $35 million in the new store, which is being built by Idaho-based ESI Construction.

Retail in Wasilla Is Creeping Westward Wasilla is seeing a spate of growth near its western boundary, on Rupee Circle near Burchell High School. A new Mudbusters Car Wash is nearly finished on that street, and Alaska USA Federal Credit Union is building a new, 3,200-squarefoot branch, also on Rupee Circle. Miller Construction Equipment recently built a 2,766 square-foot heavy equipment sales/equipment maintenance facility on Rupee Circle, says Wasilla City Planner Tina Crawford. NC Machinery operates a 98

Caterpillar heavy equipment dealership at the end of Rupee Circle. Just up the Parks Highway on Lamont Way, near Jacobsen Lake, a 7,814-square-foot daycare has been permitted, she says. It’s a significant amount of growth in a part of the city that has not previously attracted a lot of new development. City Administrator Lyn Carden says the city has long hoped for growth toward the west end of town, but it hasn’t offered any specific incentives to make it happen—aside from the incentives available to any commercial entity seeking to do business in Wasilla. “In the city, we don’t have property tax. That’s the incentive,” she says. “The other thing we have is, in our planning department, permits can take from one day to forty-five days [with a public hearing], so we can process your planning permit lickety-split. We’re able to expedite those—pretty much hand-carry them, if you want—and really, that’s a benefit to the developer,” she says. “If we can get that

permit from start to finish [quickly] for them, that’s a very good use of their dollars.”

Other Developments

Not all the growth is happening in a westerly direction. The city has approved permits for three multi-tenant retail buildings, two on Peck Street and one on Lucus Road. The Peck buildings are both permitted for 9,600 square feet and the Lucus Road building is permitted at 8,208 square feet, Crawford says. A new Panda Express restaurant opened earlier this year near Fred Meyer in Wasilla. Crawford says the same company that owns Panda Express, CFT Development, is permitted to build a 7,800-square foot building on property that formerly housed a Papa John’s Pizza restaurant and a few other businesses on Wasilla Lake. The Papa John’s Pizza property will be razed to build the new structure, Crawford says. A new building on an outparcel on Home

Alaska Business Monthly | July 2016www.akbizmag.com


“Wasilla is that crossroads of everything; sometimes you don’t see a lot and all of a sudden, it’s there. While there are some individual buildings going up, even the current spaces we have are being reused.”

NOW LEASING IN EAGLE RIVER retail | industrial | business | office | restaurant

—Lyn Carden Wasilla City Administrator

Depot’s property on East Palmer-Wasilla Highway is going through the permit process, she says. The 8,400-square-foot structure is expected to be an office building. No huge new retail structures are going up in Wasilla this year, Carden says, but most often in the city it’s these smaller retail projects that incrementally change the face of the community. “Wasilla is that crossroads of everything; sometimes you don’t see a lot and all of a sudden, it’s there,” she says. “While there are some individual buildings going up, even the current spaces we have are being reused.” Carden says the number of business licenses is on the rise, another sign that business is booming in the city. In 2015, the city had 2,150 licensed businesses. That was about 100 more than in 2014, she says.

Big Lake Plans

Outside the boundaries of Wasilla and Palmer, it’s more difficult to track development, although in the Mat-Su Borough there are plans for more construction at Big Lake. Three Bears Alaska, which operates four stores in the Valley and five more elsewhere in Alaska, submitted plans for a 4,500-squarefoot convenience/liquor store and fuel station on West Hollywood Road in Big Lake. Just a few blocks away in the East Lake Mall, Three Bears operates Big Lake’s lone grocery store. Formerly Steve’s Food Boy, Three Bears reopened it in April 2015, making the Big Lake grocery its newest store in Alaska. The convenience store would be the first of its kind for the bulk food retailer, but it must first get permission from the Mat-Su Borough to operate a package liquor store in the area. A public hearing before the Mat-Su Borough Planning Commission was slated for June. If the package store is approved there, the request goes on to the Mat-Su Assembly, where another public hearing will be held.  R Rindi White is a freelance journalist living in Palmer. www.akbizmag.com

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For leasing information, contact: Greg McDonald, CSM Office: 907-696-2828 Direct: 907-696-9613 Cell: 907-632-4224 Email: gmcdonald@eklutnainc.com July 2016 | Alaska Business Monthly

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SPECIAL SECTION

Building Alaska

Upscale Downsizing in the Real Estate Market Retirees opting for smaller luxury homes By Kailee Wallis

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onnie Swanson, a retired family practice doctor living in a condo in the Westchester Lagoon neighborhood of Anchorage, is a prime example of what upscale downsizing means to the real estate market currently. “We used to live on the Hillside and loved it. But when the kids left, it seemed ridiculous to rattle around in a five-thousand-square-foot house with constant maintenance worries, so we decided to sell,” she says. An Anchorage resident for twenty-three years, Swanson weaves the tale of her and her husband’s buying journey—from a large house in Westchester Lagoon, to a condo in Bootlegger’s Cove, then back to Westchester Lagoon where the couple recently settled in a newly renovated condo. Swanson and her husband are the perfect example of what is becoming a noticeable trend in the real estate market—upscale downsizing.

Noticeable Trend

A trend that is picking up in the Lower 48 and slowly trickling up to Alaska, as most trends do, is finally becoming noticeable. “They’ve been mowing lawns for thirty years—they’re done. They want the same kind of existence here as you would see in a Phoenix community,” says Michael King, a home buying specialist and associate broker at Keller Williams Realty. King cites the generational timeline that we are in as the reason for the trend: the demographic of Baby Boomers (47-65) are reaching retirement age and wanting to downsize from their large family homes, just like Swanson. On average, the American home has gotten smaller in the last two years, according to the National Association of Home Builders, but downsizing has not fully hit the high-end market yet. However, King says there is a demand for these high-end condo havens. King explains a recent sale of an upscale condo on 7th Avenue—tucked away in Bootlegger’s Cove. The buyer was single, an 100

“empty nester,” and ready for something smaller that didn’t require a whole lot of upkeep. “My buyer wanted a high level of fit and finish, but with a small footprint,” says King. This 1,135-square-foot condo on 7th Avenue sold for $320,000—that’s $281 per square foot. To give perspective, homes for sale in East Anchorage run for an average of $151 per square foot. But luxury is what King sold them—the two-bedroom condo has a double-door wine fridge in the kitchen, with quartz countertops and interior cupboard lighting: not exactly the average amenities for condo kitchens in Anchorage. “The idea of being able to walk to a restaurant, walk to entertainment, and bike to the trail” is what is driving the popularity of high-end condos in Bootlegger’s Cove, according to King. Many of the buyers looking for luxurious condos want the condo to be located in an urban, high-density neighborhood because they are looking to be social and live with the convenience of entertainment, in terms of restaurants and outings, that comes from living in a city.

Demographic Demand

Who is this demand coming from? According to Realtor.com, at the end of 2015 many Gen Z-ers (34-54) and Baby Boomers approached and entered into retirement. Many of them would be selling their larger family homes and wanting to downsize in to something smaller—typically under 2,500 square feet. These buyers are unique though—they are used to the luxurious amenities their family homes in suburban neighbors had, but they want to be in the culture-rich city. King says many of these buyers want the “social” aspect of living in a downtown condo. The demand is high for downtown. According to the 2014 Anchorage Economic Development Corporation Live. Work. Play. Housing Survey, 45 percent of people in Anchorage would prefer to live downtown, and 34 percent of those surveyed wanted to see more condos and

townhouses built. King also says that many of these buyers like the security a condo brings rather than a large single family home and brings up a lifestyle many Alaskans have chosen to live by—using the term “snowbird” for these summer-living Alaskans. The convenience of being able to leave home for two to three months in the winter and not worry about maintenance has many buyers charmed by this lifestyle. Why aren’t developers eager to get their feet wet in this real estate region? “I haven’t seen it a lot. There is demand, but what we don’t have is the supply, so we don’t see it as often,” King says. With the high demand for housing in Anchorage, these upscale condos are another to add to the growing list. King shares about another client he has, who is hesitant on moving from his $600,000 Hillside home. The gentleman is single with a girlfriend, but wants to move downtown for the amenities. His kids have grown up and moved out of the house, and he wants something “modern and new, where he can walk to a Steam Dot or Kaladi’s, and he can easily get to the performing arts center,” King says. “However, he feels like what he’s giving up to come downtown is not worth what he gets by staying on the hillside.”

Frozen Market

King describes this frozen market—sellers not finding the right “next step” or both parties waiting to see what the uneasy economy is going to do. “It is an awkward time; there are still buyers who want to buy, and they can’t enter into the market because the sellers who want to sell are staying put until they see what the Legislature wants to do and how our economy is going to react,” King says. Many buyers in Anchorage are waiting to see if it becomes a buyer’s market this fall with the dropping oil prices, and many

Alaska Business Monthly | July 2016www.akbizmag.com


large decisions being made in the Legislature this year. However, Keller Williams lists that condominiums are selling at 99.2 percent of their listing price in Anchorage. “We’ve had many years of under-developing, which has kept demand high,” says King. According to King, the rise in the tourism and medical industries is keeping the housing market stable in Anchorage throughout the dip in the oil industry. Another inconvenience for builders looking to latch onto this trend—it’s not cheap to put up a luxurious three to four story multifamily building downtown. “Because it’s a much more expensive way to build … it really has to make financial sense for a developer to build. You’re going to have additional requirements with earthquake prevention as you go up, with sprinkler systems as you go up, with parking, with set-backs, with landscaping—that all adds to the overall cost in making downtown more viable. And to make it financially feasible: you’re going up,” King says. And building up is what the city wants to encourage after the release of the 2012 Anchorage Housing Market Analysis, which projected that the Anchorage Bowl would need about 18,200 new dwellings by 2030 to accommodate the population.

Multi-Family Market

One of the primary goals of growing the private housing market in Alaska is improving the multi-family market. “So one of the things that the Municipality has done is that it raised the ‘ceiling height,’ the overall height that the buildings could be, to help make it more cost effective to build downtown,” says King. He’s referring to the Anchorage Municipal Code Title 21, which outlines the zoning and housing laws for Anchorage—essentially the builder’s rules when constructing. Many agree that more work needs to be done to Title 21 before builders are satisfied. However, even with some parameters in the zoning, multi-family housing development has grown exponentially in Anchorage. According to Municipality of Anchorage records, fifty-two building permits for 369 multi-family units were issued in 2015, fifty-four building permits for 299 units in 2014, and thirty permits for 123 units in 2013. Only a small fraction of those units were for luxury condos. As more people like Swanson and her husband retire, some hope that downtown Anchorage will flourish with enough upscale multi-family housing to accommodate the demand. R Kailee Wallis is a freelance journalist living in Anchorage. www.akbizmag.com

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Rendering by KPB Architects

SPECIAL SECTION

Building Alaska

Denali OB-GYN Clinic will be located on the third floor of the new Alaska Pacific Medical Center in the Anchorage U-Med District.

Construction Begins on APU Endowment Lands First building under new development agreement By Heather A. Resz

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laska Pacific Medical Center, the first project constructed under a Multi-Phase Development Agreement between Alaska Pacific University (APU) and U-Land LLC, is expected to be complete by the end of the year. The agreement gives an investor group led by Alaska Native health care organization Southcentral Foundation and Mark Pfeffer, an Alaskan commercial real estate developer, exclusive rights to develop and lease sixty-five acres of APU’s endowment lands near the Springhill Suites Marriott Hotel on University Lake Drive in Anchorage’s U-Med District. 102

The land is part of a 242-acre endowment the university received from the state in 1958 under its prior name, Alaska Methodist University. “We entered into this agreement only a year ago, and it’s always like magic to me—we’re groundbreaking one year later,” Southcentral Foundation CEO Katherine Gottlieb said during the April 26 ceremony. “As an alumna of APU, we’re really partners beyond just getting together and building buildings. We share a vision, and today, we’re seeing that vision become a reality.” Under the agreement, U-Land leases the land from APU and will own the threestory, 34,300-square-foot Alaska Pacific Medical Center.

Generating Income

Vice Chair of the Board of Trustees at Alaska Pacific University and designated APU Endowed Properties spokesperson Trigg Davis says lease income from this first U-Land project will generate more than

$200,000 annually for the university, about 10 percent of its annual operating budget. “I don’t think this endowment development is about buildings; it’s absolutely about people,” Davis says. “It’s about delivering private education to the people of Alaska, and we hope to do it on a crosscultural basis where we can deliver education equitably to people at different places financially.” The development agreement includes a “rolling” ground lease requirement wherein U-Land was required to fund and lease an initial parcel from APU and must lease successive parcels as they are platted and road and utility access is made available, Davis says. Alaska’s only private liberal arts university offers twenty undergraduate and graduate programs serving approximately 550 students and receives no state funding.

Direct Funding

Generating revenue from land endow-

Alaska Business Monthly | July 2016www.akbizmag.com


ments isn’t unique to APU. The University of Alaska system also has a Land Grant Endowment Trust Fund, as does Davis’ alma mater, Stanford University in California, and many others. “Alaska Pacific Medical Center will directly fund APU, helping to keep tuition down and helping fund its educational programs,” says Mark Pfeffer, president of Pfeffer Development. “The university [APU] is a very important part of the Anchorage educational community at large.” It’s too soon to say how many structures U-Land might develop on the acreage or a timeline for other construction. “Market demand will determine what we do next,” Davis says. Alaska Native health groups, private medical providers, and the Municipality of Anchorage have expressed interest in APU’s endowment lands, he says. The APU master plan also calls for the endowed lands set aside near the campus core to house tenants that complement the university’s programs.

First Tenant Longtime Anchorage women’s healthcare provider Denali OB-GYN Clinic will occupy the third floor of the new Alaska Pacific Medical Center in space designed by RIM Design. The practice specializes in general and high-risk obstetrics, general women’s health, robotic surgeries, in-office procedures, and minimally invasive surgeries. “We are lucky to not only be part of this project, but to be the first tenant in the first building,” says Crystal Miner, practice administrator for Denali OB-GYN. Approximately 10,000 square feet is available for lease on the first floor, and 12,000 square feet on the second floor.

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Construction Team

The Alaska Pacific Medical Center designbuild team includes Pfeffer Development, Criterion General, KPB Architects, Wells Fargo, DOWL, and Reid Middleton, Inc. Subcontractors include General Mechanical, Inc. and Alcan Electric, Inc. teaming with T3 Alaska LLC, BCX Excavating, Slana Surveying, Alaska Steel Company, AGGPRO, Inline Steel Fabricators, Core Brace, Andy Milner Company, Rainproof Roofing, Chinook Fire Protection, Commercial Contractors, Northwest Landscape, Rep Tile, Ron Webb Paving, Straightline, Statewide Door, and Glass and Otis Elevator. R

Heather A. Resz lives in Wasilla. She’s told Alaska’s stories for nearly twenty years. www.akbizmag.com

July 2016 | Alaska Business Monthly

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Building Alaska Measure of Safety Performance By Brian McKay

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here is elegance in the statement that “what gets measured, gets managed.” I have been influenced by this maxim, whether I knew it or not, throughout my entire life. From grade school to grad school and into the working world, it seems that the more something is getting graded, analyzed, or measured the more effort, time, or activity that process gets. Grades, on papers and on your report card, are important metrics on whether you have gained some set of skills or have been imparted some important knowledge, and it is important to gauge your relative understanding of the material compared to your peers. That I wouldn’t argue against (my ten-year-old son Aidan would certainly argue against this); measuring productivity and compliance within your company is an essential element within your business line; measuring competitive advantage between your competitors—a must.

Safety Rates

Safety often gets measured as a rate. A rate is any given incident over a time value. The most common incident rate in business now is arguably your company’s recordable rates or lost time injury rate. The recordable rate is defined as the number of incidents times 200,000 divided by the total number of hours worked in a year. For example, if an employer had 1 recordable incident in a year; you would multiply that by 200,000 (the expected number of hours worked by 100 workers in a calendar year) and then divide that by the actual number of hours worked by the company in any given year. For the sake of easy math, let’s say that a company had 1 recordable injury in 2015 and an average of 100 employees (1 Injury x 200,000) / 200,000 (hours worked) = (200,000 / 200,000) = 1. The recordable rate would be reported as a 1 for the calendar year 2015. Another example of a common rate found within safety is the Experience Modification Rate (EMR). This marvel of mathematical ingenuity is the product of a business’s past safety performance as it relates to workmen’s compensation rates (payouts) and its comparison to similar businesses in the State of Incorporation and adjusted for size. Basically, the amount paid out over the past three out of four years are compared to similar sized related businesses (restaurants are compared with restaurants; construction companies compared with construction companies). The numbers that come out of this equation (dumbed down in this article to relieve boredom) is a number that is less than, equal to, or greater than 1. For example, let’s compare two construction companies; Company A is a safe company and their expected workman’s compensation premium payment is $100,000 a year; Company B is not so safe but their expect104

ed workman’s compensation premium is also $100,000 a year. Company A has a great year with very few claims. In calculating their EMR for the year, it is found to be a 0.7 which means (0.7 x 100,000 = 70,000.00) they get a discount on their premium of $30,000 for that year (money back in their pocket). Company B, on the other hand, has another poor year in safety performance and their EMR is 1.3. So, (1.3 x 100,000 = 130,000) they can expect to have to pay $30,000 more over the next few years because they continue to have claims on their insurance. There are obviously many more ways to measure safety than I have described above, but those can wait for future articles. I wanted to take this opportunity to share my thoughts about these rates, and how they are used, with the readers of Alaska Business Monthly and the Alaska business community as a whole. What I may say will seem controversial to some but it seems to be a growing common thought within the professional safety world: these rates simply do not predict or properly evaluate the historical safety performance of companies.

Calculated Rates

The Occupational Safety and Health Administration (OSHA) requires that companies meeting certain requirements such as size or industrial classification calculate their recordable and lost time injury rates (a lost time event is an injury that requires an employee to take some medical leave from their job) on a yearly basis. After calculation, the rates are then “posted” on the OSHA 300 log which is then required by law to be displayed on the premises of the business for a certain amount of time. In some cases, these rates are reportable to the government and an extra step is needed to report these numbers over the internet or through the mail. The original intent of these rates was to get an idea of what was happening in the American workforce; these data were not easily accessible before the OSHA Act of 1970, or at least there were no consistent reporting requirements. Companies were categorized according to their industrial classification codes and then their “recordable” rates were compared. Industries with higher rates were categorized as hazardous and cross comparisons of companies within classification categories were now possible. Those with higher rates, compared to their peers, were deemed more hazardous.

The Abuse of the Numbers

I know what you are thinking: so what. It makes sense. The company with the higher injury rate, compared to their peers, is more dangerous. The companies with lower rates are naturally “safer.” Or are they? Let us compare Companies A and B again: Company A is a small construction company with about 100 employees. Their safety and health program is solid; they have hazard identi-

fication program, do field level risk assessments, have an aggressive onboarding and staff development program, and generally execute their work in a controlled and efficient manner. An employee of this company was exiting their car in the company parking lot when they slipped and fell. They were seen by a medical provider and given an ace wrap and some pain medication for relief. Prescription drugs, sutures, and other medically intense procedures are what make this injury a “recordable” injury as opposed to a first aid case. According to the formula presented above, this company’s recordable rate is [1 injury x 200,000 hours / (100 employees x 2,000)] = 1. Company B is a real loser. They are a bit larger with two hundred employees; their safety and health program is haphazard. They have inconsistent goals, no hazard identification program, and there is no consideration for onboarding or staff development. They get by on luck and hope. They have two injuries during the same year; the first injury is in an employee’s eye as they were struck by particles from a grinder. A foreign object was removed from the eye and antibiotics were given. There was little in the way of a risk assessment and the company did not provide the injured person with the proper protective gear. The second injury is more severe as this employee almost lost his thumb to a table saw at work. The saw was unguarded (an OSHA penalty) and the injured person had little or no actual work training on how to use the saw. Again, according to the formula [2 injury x 200,000 / (200 employees x 2,000)] = 1. As you can see, both Company A and Company B have the same rates. However, company A’s injury, and let’s be honest, is less severe than company B’s by both treatment and potential severity although they both get the exact same recordable rates.

The Great Differentiator

In today’s business climate—with everything else being equal in cost, quality, and schedule— safety becomes the great differentiator. If you want to contract for some of the major oil companies up here in Alaska, you are competing on your safety record. Your OSHA recordable rate becomes your business card. When bidding for contract work, often times one of the first deliverables is your safety and health rates, along with an example of your program. In my own experience, on both sides of the contract, the first thing looked at are the rates. Now let’s revisit the companies: A does all the right things and has an unfortunate misstep; B does all the wrong things and has an unfortunate misstep—but both have the exact same rates. If you are not careful, you would think that both companies have the same safety outcomes. But it can get worse. Admittedly, OSHA rates were never designed to be used to compare companies in a competitive atmosphere. However, following the law of unintended consequences, these rates found their way into the great business machine. Here

Alaska Business Monthly | July 2016www.akbizmag.com


are numbers that are presented almost universally across the Alaska business-scape that are readily available and consistently reported—or are they? These OSHA rates, while required, are still reported by individual companies and again, with everything else being equal (cost, quality, and schedule), the safety performance becomes the tie breaker—there is a great opportunity, under competitive pressure, to cheat and underreport injuries. You may be thinking that while cheating is possible, the EMR is certainly a more complex and exact metric. After all, it takes into consideration the last three out of four years of experience, counts claims and dollars spent on actual injuries, and either rewards companies with a premium discount or makes them pay more in the long run. This sounds like a better predictor of safety performance than that simple OSHA rate, but there are still drawbacks. For one, it does consider the last three out of four years of performance. One injury, let’s call it a strained back, three years ago may have an aggressive pay out with high costs related to rehabilitation and long term therapy and while that is important, it is not the same as ten lower cost suture repairs spread out over several years or even several serious incidents within the last year of performance which do not make it into the calculations yet (only the three previous years count in the calculation of the EMR metric; not the current year).

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Look Beyond the Numbers

I guess the message here, with an audience of Alaska business leaders, is that when you are out evaluating contractors, look beyond the numbers. There are many great safety performers out there who diligently plan and control their work; there are many out there that don’t, and there are even more that are just lucky. An honest evaluation of safety performance may well include some metrics, but their total influence on your decision to hire or not should be limited. Instead, look for consistent performance. Take time to read the Safety and Health Management Systems and ask hard questions: how do you train your new personnel, how many safety meetings do you attend or lead, what were the circumstances of your last occupational incident. Safety and health, after all, are human constructs so it matters and it takes time to evaluate accordingly; it’s not just the metrics. R Brian McKay is an Environmental, Safety, and Health (ES&H) Professional whose interests include the development and implementation of evidence based ES&H management practices across all size organizations and industries. He has a Master’s Degree in Public Health and is a Certified Industrial Hygienist (CIH) and Certified Safety Professional (CSP). Contact him at bemckay@gmail.com or (907) 406-4296. www.akbizmag.com

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INSURANCE

Alaska’s New Workers’ Compensation Fee Schedule Having a positive impact on medical costs and premiums By Tracy Barbour

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ecently, the Alaska Division of Workers’ Compensation implemented a new medical fee schedule that completely alters how providers are reimbursed for the treatments and services they render. The new schedule—which became effective December 1, 2015—is already having a positive impact on workers’ compensation costs. It’s also eliciting praise from people who say it’s a good start toward reducing some of the exorbitant medical costs that have been plaguing Alaska. The recent reforms to the Alaska Workers’ Compensation Act change the way medical care is paid for under the state’s workers’ compensation program. The program has moved away from a system of simply paying providers at the 90th percentile of billed fees considered “usual, customary, and reasonable” to an actual fee schedule determined by a RBRVS (resource based relative value system) established by the Centers for Medicaid and Medicare Services. The new fee schedule uses a fairly complex method for determining the amount providers are reimbursed. In simple terms, it calculates payments by multiplying the combined costs of each procedure—each of which now has a universal code—by a “local conversion factor.” The schedule is subject to annual review and adjustment as needed. Some people are under the impression that Alaska’s workers’ compensation program is paying Medicare prices. But that’s not the case, says Marie Marx, director of the Alaska Workers’ Compensation Division. “It is not just Medicaid and Medicare rates,” she explains. “We instead apply our Alaska-specific conversion factor for each service to arrive at a geographically-specific rate for each service. By multiplying the RBRVS by our state-specific conversion factor, you are able to calculate the maximum allowable reimbursements.” Incidentally, under the Alaska Workers’ Compensation Act, employers with one or 106

more workers must carry workers’ compensation insurance. The employer has to purchase the insurance from a licensed insurance company or be self-insured. Worker’s compensation insurance generally represents the largest outlay of an employer’s total business insurance budget.

History of Rising Medical Costs

The new medical payment system is designed to give Alaska a much-needed respite from having some of the steepest workers’ compensation costs in the country. Since 2006, Alaska has the highest workers’ compensation insurance medical costs, Marx says. “Those costs translate into one of the highest workers’ compensation insurance rates in the nation,” she says. The sharp rise in Alaska’s workers’ compensation premium rates began in 2000. Between 2000 and 2006, premium rates rose 61.8 percent, according to the Medical Services Review Committee, an advisory body established by the Alaska Legislature. In 2000, Alaska’s workers’ compensation premium rates ranked 28th in the country. By 2006, Alaska had risen to the top of the premium rate rankings, gaining the distinction of having the highest premium rates in the nation. The primary driver for Alaska’s workers’ compensation premiums is medical costs. In fact, Alaska’s medical costs comprise 76 percent of total workers’ compensation claims costs, compared to the national average of about 60 percent, Marx says. “We are 145 percent higher than the median average of all other states,” she says. Alaska’s medical costs rose from 52 percent of claim costs in 1988 to 76 percent of claim costs by 2006, reported the Medical Services Review Committee. From 2000 to 2006, total medical benefit costs rose 50.9 percent, from $81.1 million to $122.4 million. Alaska also suffered high numbers in the area of medical claim severity (size of loss-

related medical costs), which is one of the criteria used to calculate premium rates. The state’s average medical claim severity on a time loss claim averaged $53,000 per claim, compared to $29,000 nationwide, according to information presented at an October 22, 2014, Alaska State Advisory Forum by National Council on Compensation Insurance (NCCI), the rate-setting organization for Alaska and dozens of other states. Alaska’s average medical claim severity on a permanent partial impairment case averaged $95,100, compared to $40,900 countrywide. In addition, Alaska’s average medical payments were significantly higher than regional and national figures, according to a September 2014 Medical Data Report by NCCI. Surgical was one of the highest areas, being 377 percent higher than regional and 302 percent higher than countrywide. And radiology was reported at 313 percent higher than regional and 267 percent higher than countrywide, while evaluation and management was 186 percent higher regionally and 202 percent higher nationally.

New System Already Reducing Costs The goal of the new payment method is to reduce costs while preserving injured workers’ ability to access medical services. Therefore, the state adopted a “phased-in” approach to lowering medical costs gradually. “Instead of having one conversion factor for all types of services, there are different conversion factors for each, so there would not be drastic increases or decreases in the maximum allowable reimbursements in one year,” Marx says. So, for example, the conversion factor for surgery is different than for radiology. The current conversion factors are $205 for surgery and $257 for radiology, whereas pathology and laboratory have a conversion factor of $142. The conversion factor for an-

Alaska Business Monthly | July 2016www.akbizmag.com


esthesiology is $121.82, while the factor for both medicine (excluding anesthesiology) and evaluation/management is $80. The long-term objective to simplify the system, Marx says, is to have one conversion factor applicable to all services. But implementing a single conversion factor in one year would have caused some services to be more significantly impacted than others. With the current approach, the impact will take place incrementally over several years. “It is anticipated that the phased-in approach will help protect injured workers’ access to medical care,” she says. NCCI estimates that the recent changes made to Alaska’s fee schedule will result in an overall reduction in workers’ compensation system costs of an average 3.7 percent. Because of the anticipated reduction, NCCI proposed a loss cost decrease for the workers’ compensation rate. And on April 27, the Alaska Division of Insurance approved a NCCI filing that lowered the overall average loss cost and assigned rate level by 3.7 percent. Marx says the 3.7 average rate reduction will have an immediate impact, as insured employers will see an average 3.7 percent

payroll and ABC Insurance has a 1.5 loss cost multiplier, then ABC Insurance’s rate for the class code will be $1.50 per hundred dollars of payroll. In addition, carriers have the ability to debit or credit a policy if they feel the total premium is inadequate or more than adequate for the risk. “If the medical costs decrease, we should see a decrease in the loss cost rates that NCCI recommends,” Gordon explains. However, he adds: “The effect of lower medical expenses will take two to three years to work its way through the loss cost rates, since these are set using historical loss data. In short, time will tell.” Self-insured employers in Alaska are already reaping the benefits of the lower medical costs instituted by the new fee structure. They are noticing some significant cost savings in hospital, surgical, and chiropractic services. “Some employers are seeing a 40 percent reduction in surgery and hospital expenses and a 20 percent decrease in the cost of chiropractic care,” says Chuck Brady, president of the Workers’ Compensation Committee of Alaska,

“Montana has had several years of significant loss cost reduction. If Alaska implements comprehensive reform to reduce costs, we can hope to see a lowering of workers’ compensation premiums similar to what has been achieved in other states like Montana. The new medical fee schedule is a good step in that direction.”

—Marie Marx Director, Alaska Workers’ Compensation Division

reduction in their premiums. “That’s great news,” she says. For $100,000 in premium costs, employers will receive a $3,700 reduction. The lower loss costs and assigned risk rates apply to new and renewal policies effective May 1, 2016, and later. Premiums should continue to drop in the future as medical costs decrease under the new fee schedule. But the impact may take several years to fully develop, according to Denali Alaskan Insurance President Mike Gordon. That’s because NCCI looks at three years of loss history for the “experience modification” for each employer. NCCI recommends the loss cost rates for each class code (job classification code) that all insurance carriers have to use to calculate their individual rates. Each carrier has a loss cost multiplier filed with the state, and they use it to calculate their rates for each class code. For example if the loss cost rate is $1 for every hundred dollars of www.akbizmag.com

a nonprofit advocacy and education group. Brady says he is optimistic about the new fee schedule and is happy to see that it is having an immediate effect. “The fact that it is having an immediate impact is an indication of how out of control things were,” says Brady. Currently, about thirty other states are using a fee schedule that is similar to Alaska’s. For example, Montana introduced multiple measures in 2011, resulting in an estimated 22 percent reduction in workers’ compensation costs. “Montana has had several years of significant loss cost reduction,” Marx says. “If Alaska implements comprehensive reform to reduce costs, we can hope to see a lowering of workers’ compensation premiums similar to what has been achieved in other states like Montana. The new medical fee schedule is a good step in that direction.” Brady agrees, saying the fee schedule is a “good start.” He feels the biggest impact July 2016 | Alaska Business Monthly

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of the new reform will be the stabilization of costs. “It will bring some costs down and limit the increases that we see year to year,” he says. “Right now, that’s a good thing. We need to keep those costs down.” Dave Kester, a senior account executive for Alaska USA Insurance Brokers, also expressed favorable comments about Alaska’s new fee schedule. “For the first time, the state of Alaska is taking a meaningful step toward containing the high costs of medical care in workers’ compensation cases in Alaska,” Kester says. “Also, the state of Alaska will now be using a fee schedule model that is more in line with what both the federal government and other states pay for medical care under Medicare and Medicaid.” Kester points out that all of the states using payment systems similar to Alaska’s have experienced significant cost containment, and he expects the same results in Alaska. “Successful medical cost containment will translate into real savings to employers, in terms of workers compensation premiums; to workers compensation insurers, in terms of claims costs; and to the state of Alaska, as the largest employer in the state,” he says. According to Kester, states that have been successful in containing the high cost of workers’ compensation have three things

in common: RBRVS, treatment guidelines and employer directed treatment. “Alaska, to date, has only tackled the first area, which is a good first step in the process of containing medical costs,” he says.

Impact on Access to Medical Care In theory, the new payment system is designed to maintain employee access to medical care while improving medical cost stability and predictability to the employers who are required by law to pay for those benefits. However, there is some concern about the impact that the fee schedule will have on access to medical care. Some providers are worried that it will drive reimbursement rates down closer to those of Medicare and impede their ability to serve injured workers. Gordon expressed a similar concern. He thinks the availability of medical care could be an issue. “I think doctors are not going to take as much workers’ comp patients at the lower price,” he says. But there could also be a positive side if there is a shortage of specialists and other providers available to treat injured workers. More workers may be willing to have their procedure done outside Alaska, where

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it will be more cost-effective for their employer. “It’s too early to know what will happen,” Gordon says. Marx, however, has a different view. Because the phased-in conversion factors will decrease medical costs gradually, she doesn’t expect there to be any hindrance to injured employees getting medical care in Alaska. Brady has a similar perspective. So far, there has not been an adverse effect on workers’ access to care, and there won’t be, he says. “Every time there is a change in the law that will affect the rates that doctors can charge, we always hear how it will drive doctors out of the market,” he says. “But workers’ comp will still pay much more than other forms of insurance. Access won’t be limited, even if the doctors see some reduction in their reimbursement rates.” Kester says it is too soon to tell, but he doubts there will be a negative impact on access to or quality of medical care. He says the Alaska fee schedule rates are far higher than those paid under Medicare and Medicaid—generally 200 to 300 percent higher. “This ensures that medical providers will still be motivated to provide quality care to injured workers,” he says. There has been no reported impact in access to medical care for injured workers and no reported impact to quality of service for injured workers, Kester says. “The intent was that reimbursements for medical care would be cost-neutral to 2014-2015, which simply means that the fee schedule has prevented the cost of medical care from escalating in 2016,” he says. “One major hospital is projecting a reduction of 20 percent in their revenues for medical fees for inpatient care for injured workers under the new fee schedule.” McKenna Wentworth, president of Wilton Adjustment Service, hasn’t noticed a reduction in access to medical care either. “So far, I haven’t seen anybody be turned down because providers are not taking workers’ comp anymore,” she says. Wentworth, an Anchorage-based independent claims adjustor, also feels reimbursements rates under the new schedule are higher than those paid by private insurers. “It seems to me they [providers] are more or less accepting it,” she says. “Personally, I haven’t seen a substantial increase in the volume of provider appeals.”

Changing the Way Rates Are Compared Under the previous 90th percentile system, reimbursement for fees considered usual, customary, and reasonable was based on the average amount charged by three providers in the same zip code, according to Wentworth. Essentially, payments ended

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up being made according to what a few providers set. The new fee schedule takes a long-overdue, broader approach to calculating medical reimbursement rates. It factors in the physician’s work (resources used), practice expertise, malpractice expense, and geographic location for each service rendered. The fee schedule also streamlines the universal coding system and compares the work of Alaska providers to what everyone else is doing nationally, Wentworth says. “We don’t just compare ourselves to ourselves anymore,” she says. “I think this was a stabilization issue.” Brady, like Wentworth, feels that the new payment system essentially keeps physicians from setting their own rates. “Doctors used to determine what was usual and customary, and they could increase their fees and ultimately impact the 90th percentile rate,” he says. “With the new system, now the rates are indexed to Medicare and Medicaid payment schedules. It sets something that is more objective, stable, and widely-acceptable.”

Effect on Claims Handling

The reforms to the Alaska Workers’ Compensation Act are also modifying the way workers’ comp claims are being processed.

“From a claims handler perspective, we’re changing our reserves for what we expect you to pay on a claim [based on the probable outcome],” Wentworth says. “People should see a decrease in the amount of reserves.” For example, an outpatient surgery facility might have charged $12,000 to $35,000. Those prices were almost paid in full under the prior fee schedule. “Now what we’re seeing is those charges might get paid out at $6,000 to $25,000,” she says. Wentworth adds: “I didn’t expect it would have that big of an impact until I started to see some of these claims coming through. It’s made us change our expectations.” The new workers’ comp reforms have also changed the amount of time providers have to submit medical records for claims. If they fail to turn in a bill within the first six months, payment can be denied. Then they have just sixty days to appeal to the Alaska Workers’ Compensation Board. “It’s forcing providers to be more timely with their billing,” Wentworth says. Wentworth adds that she has to give credit to the new fee schedule. “I do think it’s impacting our claims handling in a positive way,” she says. There are still a lot of pieces people

would like to see happen before Alaska has a great workers’ compensation delivery system, Wentworth says. For instance, providers and employers would like to see more guidance on what procedures need to be preapproved. In the worker’s comp world, preauthorizations are not standard, but they could help eradicate some uncertainty and litigation. “Any time you have a process that gets rid of uncertainty, that’s a good thing,” Wentworth says. While medical costs are an important aspect of workers’ comp costs, there are other things to consider, Wentworth says. For instance, litigation is another major factor that affects workers’ comp costs. “These cases are hard to defend in Alaska,” she says. “Employers don’t get a lot of favorable decisions from the Workers’ Comp Board, so insurance companies tend to settle.” Brady also feels that the new medical fee schedule addresses only part of the issue. “This is just the beginning; the fee schedule does not solve all our problems,” he says. “The next thing we need to tackle is utilization review and objective treatment guidelines.”  R Freelance writer Tracy Barbour is a former Alaskan.

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HEALTHCARE

The American Heart Association in Alaska Healthy living and healthy hearts in the Last Frontier By American Heart Association, Alaska Division

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ccording to the Chronic Disease in Alaska 2016 Brief Report, heart disease is the second leading cause of death in Alaska; in 2014 heart disease accounted for 19 percent of deaths; and in 2014, 26 percent of adults reported having high blood pressure. Scott A. Wellmann, MD, pediatric cardiologist at the Alaska Children’s Health Center and a member of the American Heart Association’s (AHA) Alaska Division Board of Directors, says that the Association’s 2020 goal “is to reduce death from cardiovascular disease and stroke by 20 percent and also increase cardiovascular health in Americans by 20 percent. As Alaskans we can help to optimize our cardiovascular health by embracing an active lifestyle as a part of our culture.”

Heart Health Events

AHA hosts major events in Anchorage and 110

Fairbanks in its efforts to educate the public and promote cardiovascular health. Two of them are Go Red for Women conferences designed to empower women to take charge of their heart health and dispel the myths and raise awareness of heart disease and stroke as the number one killer of women. The events include men’s breakfasts to share information that can help men help to educate the women in their lives of their heart and stroke health risks and improve their own health. The women’s conferences also include health seminars, expos with free health screenings, fund-raising silent auctions, and keynote addresses by nationally-recognized health speakers during formal luncheons. “Heart disease affects one out of three women, and most women think of heart disease as a man’s problem,” says Lynn Rust Henderson, vice president of sales and service for Premera Blue Cross Blue Shield

of Alaska and member of AHA’s Alaska Division Board of Directors and Go Red For Women Leadership Team. “Another critical point of women’s heart health is that women don’t always experience the same symptoms when having a heart attack,” Rust Henderson adds. “You don’t have the classic grab your arm or your chest and fall down. It could be jaw pain, nausea, indigestion, or lower back pain.” Another of the AHA’s fund-raising and awareness events is The Alaska Heart Run, which took place on April 23. More than six thousand people attended the event to both run and walk. “We raised approximately $311,000, and our goal was $290,000,” adds Rust Henderson. The Heart Run is a certified 5K, but people of all fitness levels are invited to participate. “People put together teams, schools participate, and families gather together to run or walk because they like to be active together or are supporting

Alaska Business Monthly | July 2016www.akbizmag.com


a survivor who’s participating,” Rust Henderson says. The 2016 Heart Run had more than one hundred cardiovascular disease survivors participate. Rust Henderson says that one young survivor named Aubrey, age seven, was actually the top fundraiser for the Heart Run, bringing in more than $2,000. The AHA also hosts Heart Walk events in Anchorage and Fairbanks. This year’s Anchorage Heart Walk will take place September 24. The event is being chaired by Terry Bailey, senior vice president and Alaska regional manager of CH2M, and his wife Karen. “The Heart Walk is a family celebration, it’s noncompetitive—it’s really about educating people how to maintain their heart health,” says Terry Bailey. Similarly to the Heart Run, the Heart Walk will feature booths from the event sponsors, free hands-only CPR lessons, free blood pressure screenings provided by the Alaska Nurses Association, lots of opportunities to learn about heart health, and a concert at the end. While there’s a registration fee for the Heart Run, the Heart Walk and concert are free to attend, though AHA recommends a $25 dollar donation.

awarded in January 2015; funding will end December of this year.

Healthy Youth

“AHA wants to help people improve their quality of life by practicing healthier lifestyles, including being more active and eating more healthful diets and avoiding tobacco smoke,” Wellmann says. “Eighty percent of current heart disease and stroke cases can be prevented by education and lifestyle changes. It’s a pretty startling number.” The Chronic Disease in Alaska 2016 Brief Report states, “Four healthy lifestyle

factors—never smoking, maintaining a healthy weight, exercising regularly, and following a healthy diet—together appear to be associated with as much as an 80 percent reduction in the risk of developing the most common and deadly chronic diseases.” While it’s never too late to adopt a healthy habit, it’s certainly a more arduous process to change a habit than learning and adopting a healthy one from the beginning. To that end, AHA works closely with Alaska schools to reach the state’s youth. Its Jump Rope for Heart and a Hoops for Heart programs give students opportunities to learn about heart health, be active,

Where’s the money go?

As all of AHA’s events have fund-raising components, it’s natural to wonder how the funds are used. “Over 20 percent of all the money raised by AHA is invested in lifesaving research,” Wellmann says. “That research serves as the foundation of AHA’s education, community outreach, quality patient improvement, and public health policy initiatives.” According to the AHA, in 2014 out of every dollar 21.8 percent went towards research; 36.4 percent towards public health education; 14.2 percent towards professional education and training; 6.7 percent towards community service, 8.6 percent towards management and other general needs; and 12.3 percent towards fundraising. The AHA, by national policy, does not accept government funding, so all of its work is funded through its community events, through grants, corporate sponsorships, and personal donations. AHA is second only to the National Institutes of Health in the amount it invests annually in cardiovascular research. Some of the research currently funded by the AHA is actually being conducted in Alaska. A researcher at UAF was awarded a research grant to study the way bears hibernate, and how that knowledge might be applied to improve open heart surgery technique by slowing down heart rate, and lowering body temperature. The grant title is “Translating Hibernation for Therapeutic Hypothermia,” and was www.akbizmag.com

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Positive Leadership for Active Alaskan Youth By American Heart Association, Alaska Division

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n February the Alaska Sports Hall of Fame presented the first annual Positive Leadership for Active Alaskan Youth (PLAAY) Summit at the Alaska Native Tribal Health Consortium. The purpose of the summit was to provide teachers, parents, nurses, coaches, administrators, and other youth leaders with information about adolescent health, emphasizing the importance of physical activity as a means of improving teenage health. The summit’s itinerary included keynote speaker Dan Bigley, clinical director at Denali Family Services, plus panels and several topical presentations:

and raise funds for their community. In addition, Anchorage, Eagle River, Chugiak, Matanuska-Susitna Valley, Wasilla, and Palmer School District 8th graders receive AHA hands-only CPR training. Hands-only CPR kits that contain inflatable CPR manikins and a training DVD

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Athletic Panels

 What Does Positive Leadership Look Like  Overcoming Adversity

Topics

 Youth Nutrition and Hydration in Sports  Concussions . . . Medically, Where we are Now  A Holding Environment: How Important is Yours?  The Importance of Physical Activity in Suicide Prevention  More than Muscles: Recognizing and Utilizing our Strengths  Lower Extremity Agility for the Adolescent and Pre-Adolescent are provided to Anchorage School District schools. Students watch the DVD and practice hands-only CPR on the manikins. For any Alaskan with access to the internet, AHA’s website (heart.org) is a useful tool when looking for information about heart disease and stroke. It includes in-

 Smart Shoulders: Taking Care of the Adolescent Shoulder in Sports and Play  The Efficacy of Physical Activity Programs for Alaska Native Children Living in the Remote Arctic Harlow Robinson, executive director of the Alaska Sports Hall of Fame, says, “Alaska is wealthy in human resources. There are so many talented and knowledgeable people within their particular field. PLAAY provides the opportunity to bring them together around a shared passion.” He continues, “The PLAAY Summit and now the PLAAY Day has created a tremendous opportunity for collaboration among individuals and organizations that care about youth and health issues.” R

formation ranging from healthy recipes and smoking cessation tips to patient and caregiver support networks. It’s “My Life Check” online tool offers an opportunity to do a personal heart-health assessment, and then to develop a plan using simple steps to improve your health.  R

Alaska Business Monthly | July 2016www.akbizmag.com


OIL & GAS

Oil & Gas Underwater Support Services

Productive, efficient, and safe in Alaska’s challenging waters By Tasha Anderson

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t’s difficult enough in Alaska maintaining and servicing various oil and gas industry equipment and infrastructure to ensure that projects run efficiently and safely for everything involved: the equipment, the environment, and the people. Consider then the extraordinary skillset required to build, maintain, and repair such vital infrastructure while working in Alaska’s frigid waters, often on the North Slope or in the notoriously difficult conditions of Cook Inlet.

Global Diving & Salvage

“There’s absolutely no visibility in Cook Inlet most of the time,” says Global

Global Diving & Salvage Diver Jake Elhard surfacing from a dive on a platform in Cook Inlet. Photo courtesy of Global Diving & Salvage

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Pipeline sand bag stabilization operations in Cook Inlet from Global’s DSV Sand Island. Sand bags are utilized to support areas under the pipelines in where the seafloor scours away due to high currents. Photo courtesy of Global Diving & Salvage

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Diving & Salvage, Inc. Alaska Region Dive Operations Manager Bernie Rosenberger. “Even with a light on the diver’s helmet or a high intensity light, you’re only lighting up the area right in front of your face, and it’s just muddy brown water,” which is why it’s commonly referred to as black water. Rosenberger says that that kind of low visibility isn’t necessarily unique to diving in Alaska, but “combined with the current and the short bottom times available to safely dive, it makes for a pretty challenging environment to work in.” He goes on to say that the Cook Inlet can have up to a thirty-foot tidal change four times a day, which results in swift tidal currents, up to six knots. “Sometimes the fixed platforms look like they’re moving boats and have a wake.” In May of this year, Global had a team onboard their dive vessel in the Cook Inlet performing annual inspection work for Hilcorp Alaska, which operates twenty oil and gas fields, including fourteen offshore platforms in the Cook Inlet. Rosenberger says that Global rotates through inspecting different structures at different times, but generally there’s some kind of work that they’re doing in the Cook Inlet every year.

R&D Saves Time and Money

Global invests a lot of time and money into research and development to find innovative ways to make diving and dive projects safer, less costly, and more efficient, says Global’s Alaska Region General Manager Deirdre Gross. “We’ve looked into and currently utilize advanced technology systems to help divers locate targets in zero-visibility” said Rosenberger. Historically divers would just walk on the bottom of the inlet with a survey line, sweeping an area in an effort to “catch the search line on something or just stumble across the pipeline while sweeping.” Now, using sonar technology, divers can land on the inlet floor and be directed towards the target. He says, “We can be upwards of one hundred feet from a target, if we get bad position data, and still get on it within a few minutes.” Rosenberger says this leads to significant savings in both time and cost for underwater projects. In the past, if inaccurate data set a diver down in the wrong place, it could take three or four separate dives to locate the pipeline or other infrastructure. “You have to imagine closing your eyes and being somewhere you’ve never been and trying to find something just a foot off the bottom,” he says. “And hope it hasn’t moved,” Gross adds.

Pooling Resources

Last year, Gross says, “We assisted in the Furie Kitchen Lights Project, which was to install a monopod and pipeline in the Cook Inlet. We assisted in the installation of six116

Alaska Business Monthly | July 2016www.akbizmag.com


teen miles of concrete coated pipeline and we had twenty-five plus divers on the project from May until late fall, working from three separate diving platforms.” It was a significant undertaking, involving continuous twenty-four hour operations. Rosenberger says Global had three dive crews working simultaneously on that project: one dive crew on a pipeline barge, one dive crew on a vessel working on the platform, and a dive crew on Global’s vessel doing scour remediation and support work along the pipeline as it was being installed. “It was a lot of work, and it was challenging,” Gross says, especially from a project management standpoint, a project of that magnitude sees a lot of changes as it progresses. “A lot of daily problem solving,” Rosenberger says. The project does highlight one of Global’s strengths: in addition to their Alaska operations, they have California, Gulf Coast, and Pacific Northwest regions, all of which have resources that can be pooled or shifted as necessary. For the Furie project, Global brought in divers from some of its other regions. The ability to share workers and resources is a benefit to Global’s clients, but it also works to the advantage of its employees. The access to resources increases the types and scope of projects the company can take on: “The more diverse projects that

we do, allow us to keep our guys busy yearround,” Rosenberger says. “Conversely, our other regions do the same thing with us. Our guys have some unique skill sets and they can be brought in for a special project in California or the Pacific Northwest … so there’s a lot of opportunity for our guys.” This type of coordination is present in all of Global’s activities, and it’s vital in the Cook Inlet, where various other oil and gas companies and their contractors may be performing their own work. Rosenberger explains at the same time as one of their projects, another company was performing seismic work in the inlet. “They create really large sound impact levels to penetrate the seabed and see what the substrates are.” Underwater noise can affect divers the same way it can affect marine wildlife, ranging from irritating and disorienting to divers feeling as if they’re being punched in the chest and worse. “We had to basically establish range limits and things like that for the guys and coordinate with other projects and operations we weren’t even involved in to make sure that everybody is working safely,” he says. Gross says, “Our clients are very receptive when we approach them and with a safety concern and we work together to resolve the issue safely, and cost effectively.” “Overall safety is right at the top of everybody’s list,” Rosenberger adds.

American Marine

Safety is certainly at the top of the list for American Marine International. According to Vice President Tom Ulrich, the company has an eight-year zero Total Recordable Incident Rate, starting in 2008, “and we plan on holding it through 2016 and beyond,” he says. As of 2014, the company had logged more than 1 million man-hours without a diving related injury or emergency condition—a figure that’s only grown as the company logs approximately forty thousand to sixty thousand man hours a year. Jose Owens, Operations Safety & Compliance manager for American Marine, says a safety record like this is due to “a culture in your organization where all the guys just want to be safe and they want to make sure that all their coworkers are safe.” Owens says all of their clients are “very stringent with their rules and regulations” concerning safety, another factor in why American Marine maintains a high level of awareness and assertiveness in their safety programs. American Marine does work throughout Alaska, which includes providing services to the oil and gas industry in Cook Inlet and on the North Slope. The company has received awards for projects involved in repairing a cable failure in Kodiak, replacing and stabilizing pipelines, servicing repairs

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and dredging off the Ship Creek Dam, and installing Cook Inlet platform icebreakers. Most of their oil and gas work is comprised of inspections and regular maintenance, such as installing/replacing sacrificial anodes—essentially zinc or impressed current assemblies that are bolted, welded, or otherwise attached to the submerged portions of vessels or infrastructure to protect the structural metal components from corroding. American Marine owns a dive support vessel called the Shamrock, which was built to work in Cook Inlet and accommodates eleven personnel onboard. It has a low profile, meaning that it can work under and adjacent to the platforms, is a power scow with a shallow draft, and has “wheels in tunnels” allowing it to go dry. “It has all the advantages of working in the Cook Inlet,” Ulrich says. The company also charters vessels as necessary for other projects.

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American Marine states that a significant part of the preparation process is up to the individual. To function in Cook Inlet’s black water conditions, “you have to have a comfort level of being in confined spaces; if you’re ok with it, you almost have a sixth sense of where you are,” Ulrich says. Owens shares that “it’s a comfort level with yourself and with the crew.” He continues, “You kind of have to develop your mind’s eye, as far as being able to translate what you’re seeing to the top side people so they can help you get around and figure things out [in an environment with poor visibility]. It’s 100 percent communication all the time, and also knowing the equipment, knowing how to handle situations when they do come up, and knowing yourself quite a bit, too.” Ulrich also emphasizes the importance in Cook Inlet of knowing what the other teams are doing. “You have to be extremely aware of SIMOPS [simultaneous operations], what’s happening on the platform, other vessel traffic, [and] if there’s survey operations going on.” Owens says, “You got a diver down there below you, so you have to make sure nothing is going to jeopardize him in any way. There’s a single diver in the water and everybody watches out for him.”

North Slope

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VMAC RAPTAIR-MF MULTIFUNCTION SYSTEM

American Marine has also done projects on the North Slope, where water conditions are different and difficult to forecast. To keep divers warm in those frigid waters, divers are equipped with a suit that pumps heated seawater throughout the suit. “So he’s the happiest guy on the crew,” Ulrich laughs. He says the suit is outfitted with gloves that have surgical tubing, pumping water throughout the whole suit in addition to warming the breathing gas.

Alaska Business Monthly | July 2016www.akbizmag.com


Global Diving’s DSV Sand Island preparing to install an impressed current anode on a Cook Inlet platform. These anodes are installed to protect the platform from corrosion. Photo courtesy of Global Diving & Salvage

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Pipeline closing spool piece being placed into position with crane. This section of pipe attaches the beach section on the bottom to the pipeline laid across Cook Inlet from the platform. Photo courtesy of Global Diving & Salvage

The water can have better visibility than Cook Inlet, depending on the area and sea conditions, Owens explains, but instead of significant tidal fluctuations there is an ice issue—though, the ice can serve as a benefit as well. When the ice forms, American Marine can set up a temporary facility with a “pool” cut into the ice. “When you’ve got packed ice overhead and you have a facility that has open water inside, it makes just as much sense to dive in the winter than any other time,” Owens says. He continues, “You get more of a window to actually work than when it’s open water and wave action is making things more

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difficult.” However, ice in the water is a significant hazard. “Most of the time we get all of the ice out of the way with heavy equipment: a crane moving a block of ice isn’t an uncommon thing. If there is ice encroaching on a diver, we need to get him out of the way.” Another issue unique to the North Slope is polar bears. “If you see one approaching, it’s an all stop,” Owens says. “Everybody gets out of the water, gets in the facility, and we call the environmental company to monitor the bear from there.” Ulrich says the real issue with polar bears is that they simply are not afraid; they have no compunction about

taking a nap on a construction site, and environmental policies do not allow any interference of the bear’s activities. One project that American Marine completed on the North Slope was for BP. The project included repairs to BP’s Northstar Island and involved “underwater burning,” a method utilized for cutting steel underwater. Ulrich says BP had removed this method at their operations worldwide since it carries a high level of risk: “There have been an awful lot of diver injuries, explosions, and flashbacks with underwater burning because you are using oxygen, so the oxygen and the byproducts of the burning rod create hydrogen gas pockets that can ignite,” Ulrich explains. American Marine responded by providing qualified underwater burning procedures and personnel that underwent a stringent review and approval process by BP. In the end, the project was completed more safely and expeditiously, taking thirty-eight hours of underwater burning and fifty-nine hours of welding. “It was a lot of time spent doing highly dangerous things,” Ulrich says. “But we pulled it off successfully and more importantly, safely.”R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

Alaska Business Monthly | July 2016www.akbizmag.com


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OIL & GAS

ConocoPhillips Alaska’s Kenai Liquefied Natural Gas Plant in Nikiski.

ConocoPhillips Alaska Won’t Export LNG This Year License for international exports extended to February 2018 By Heather A. Resz

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fter carefully reviewing market conditions, ConocoPhillips Alaska has announced it will not export LNG (liquefied natural gas) from its Kenai Liquefied Natural Gas Plant in 2016. 122

ConocoPhillips Alaska Natural Gas Corporation was granted a license in February to export 40 billion cubic feet of LNG from its LNG facility in Nikiski to international markets during the next two years.

If market conditions change, the company could resume exports at any time before the US Department of Energy authorization to export expires in February 18, 2018. “The Kenai LNG Plant remains operation-

Alaska Business Monthly | July 2016www.akbizmag.com


Courtesy of ConocoPhillips Alaska

LNG tanker loading at the ConocoPhillips Alaska’s Kenai Liquefied Natural Gas Plant export facility in Nikiski.

Courtesy of ConocoPhillips Alaska

al and ready to resume exports and we will continue to evaluate opportunities for future LNG exports,” according to a prepared statement from ConocoPhillips Alaska.

World’s Largest

ConocoPhillips Alaska’s Kenai LNG Plant in Nikiski was the world’s largest LNG plant when it was constructed and was the only licensed US commercial LNG exporter for most of that nearly fifty-year span. The Alaska terminal also pioneered LNG exports to the Asia-Pacific market, safely loading and shipping more than 1,300 tankers of LNG since the facility was first licensed in 1967. On the home front, the LNG plant is a crucial commercial asset that helps keep Cook www.akbizmag.com

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Inlet natural gas wells operating year-round, helps keep the lights and heat operating on winter’s coldest days, and employs about eighty-five people—about twenty-five directly and the remainder through contractors— that add an estimated $13.1 million in personal income to Alaska’s economy annually. Those are just some of the reasons the US Department of Energy noted in a February order authorizing ConocoPhillips Alaska Natural Gas Corporation to continue exports.

Cook Inlet Production

Cook Inlet fields have produced 1.3 billion barrels of oil, 7.8 trillion cubic feet of

gas, and 12,000 barrels of natural gas liquids since commercial development of the region’s hydrocarbons began in 1958 and could produce another 1,183 billion cubic feet from remaining “proven and probable” reserves in legacy fields, according to September 2015 Alaska Department of Natural Resources Division of Oil and Gas estimates. Oil and gas production in Cook Inlet began to decline as early as the 1970s, and by the turn of the millennium, producers and the state believed the oil and gas reserves in the basin were largely depleted, according to news accounts from that time.

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Supply Uncertainties

Uncertainty about Cook Inlet natural gas supplies led ConocoPhillips to mothball the plant for much of 2013, but at the state’s request, later that year ConocoPhillips Alaska reapplied to the US Department of Energy and was granted a two-year export license. ConocoPhillips’ proprietary technology chills the raw natural gas to –259 F, shrinking it to less than 1/600th of its original volume, making long distance shipping economically feasible. The LNG plant once had a sister business that helped the “closed” Cook Inlet gas market function. But the Agrium fertilizer plant on the Kenai Peninsula closed in 2007. Now natural gas produced in Cook Inlet is only sold to Alaska electric and natural gas utilities or exported as LNG under ConocoPhillips’ license.

Recovery Act

To avert natural gas shortages, the Legislature passed the 2010 Cook Inlet Recovery Act, which expanded capital credits available to producers in the basin and led to the construction and operation of the 11-billion-cubic-foot Cook Inlet Natural Gas Storage Alaska facility, the first commercial underground storage in the state. The storage facility warehouses gas produced in the summer for use in the winter when demand outpaces production on the coldest days. Gas was first withdrawn from the $161 million facility in November 2012. The recovery act also incentivized the transition from the large companies that pioneered the Cook Inlet basin to smaller, independent companies that invested new capital in exploration and reconditioning legacy fields.

Resource Assessments

Recent resource assessments completed by two independent groups suggest the Cook Inlet basin still contains trillions of cubic feet of undiscovered, technically recoverable oil and gas resources. A 2011 US Geological Survey assessment pegs mean undiscovered oil resources at 599 million barrels and mean undiscovered gas resources at 19,037 billion cubic feet. The most recent resource estimate was issued April 2015 by the Potential Gas Committee of the Colorado School of Mines, which gauges gas resources in the Cook Inlet-Susitna Basins at over 4,400 billion cubic feet. R Heather Resz lives in Wasilla. She’s told Alaska’s stories for nearly twenty years.

Alaska Business Monthly | July 2016www.akbizmag.com


Inside

Alaska Business July 2016 AMATS nchorage Metropolitan Area Transportation Solutions (AMATS) in partnership with Alaska Department of Transportation & Public Facilities and the Municipality of Anchorage announced the award of $3.5 million dollars for transportation alternative projects for Anchorage. These projects will be funded by Federal Highway Administration dollars through the Transportation Alternative Program, which supports local transportation safety and recreation enhancements. Muni.org

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MODA HEALTH oda Health Plan, Inc. announced that they will not offer healthcare insurance in the individual market in Alaska in 2017. Current and new policyholders will be covered through December 31, 2016. During the Affordable Care Act’s 2017 open enrollment period, which begins in November 2016, individuals will have to choose a different insurer. The Division of Insurance anticipates that Premera BlueCross-Blue Shield will be the only insurer offering plans in the individual market in Alaska in 2017. commerce.alaska.gov

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ALASKA STATE FAIR he annual Alaska State Fair is going smoke-free in 2016. The Fair’s new smoke-

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Compiled by Tasha Anderson free policy was adopted earlier this year, and will take effect at the 2016 event, to be held August 25 through September 5. The smokefree policy applies to tobacco products and/ or vapors from electronic smoking devices. Specifically, it prohibits carrying, holding, inhaling, or exhaling the smoke of a lighted pipe, cigar, cigarette, plant material, or of any other lighted or heated smoking equipment, including e-cigarettes that create a vapor or any other oral smoking device. alaskastatefair.org COFFMAN ENGINEERS, INC. offman Engineers, Inc., a mid-sized, multidiscipline engineering firm, is pleased to announce the joining of Honolulu-based fire protection engineering firm S.S. Dannaway Associates, Inc. through an asset acquisition. S.S. Dannaway Associates is the Pacific Rim’s leading fire protection engineering firm. They bring to Coffman fourteen staff members and more than thirty years of experience through offices in Honolulu and Guam. coffman.com

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ALASKA USA laska USA Federal Credit Union expanded into the Spokane area with three new branches which opened May 23 and include the Northwest branch at 2507 W. Wellesley Ave., South Hill branch at E. 2509 29th

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Ave., and University District branch at E. 933 Mission Ave. All are located inside Safeway stores. The Spokane branches will offer a full range of credit union services, including checking and savings accounts, consumer loans, and credit cards. alaskausa.org PORT OF JUNEAU n May 6 the M/S Volendam, a HollandAmerican cruise ship, arrived at the CBJ owned Cruise Ship Terminal Dock, marking the first vessel to moor at the newly constructed berth. The new cruise ship berth project is part of a multi-phase effort by the Port of Juneau to improve the safety and efficiency of the cruise ship berths and the associated uplands. The Volendam’s visit was the first of 132 scheduled visits to the Cruise Ship Terminal Dock this season. juneau.org

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ALASKA WILD SALMON DAY overnor Bill Walker signed HB 128 into law May 7, establishing August 10 of each year as Alaska Wild Salmon Day to celebrate the enormous bounty of wild chinook, sockeye, coho, chum, and pink salmon Alaskans harvest each year. Drafters of the bill encourage Alaskans of all ages to observe the day through educational and celebratory events, projects, and activities. gov.alaska.gov

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

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

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501 July 2016 | Alaska Business Monthly

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INSIDE ALASKA BUSINESS ALASKA AIRLINES laska Airlines and Japan Airlines have announced plans for a codeshare agreement and frequent flier partnership, which will provide seamless travel and mileage earning opportunities between Alaska’s gateways in North America, Japan, and throughout Asia. With the new codeshare agreement, to take effect this month pending government approval, customers flying on Alaska Airlines and Japan Airlines will enjoy seamless reservations and ticketing; one-stop check-in, baggage checked to final destination; smooth flight connections; and the ability to earn miles on the other airline and outstanding customer service. alaskaair.com

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GCI CI TV customers with TiVo will now have access to Hulu, giving customers the ability to instantly stream current-season TV, original series, all-time favorites, hit movies, and more directly from their TiVo cable box. GCI.com

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THE LAKEFRONT ANCHORAGE he Lakefront Anchorage Hotel, home of the Iditarod Sled Dog Race and the only hotel in Anchorage on Lake Hood and Lake Spenard, reopened the Deck at Lake Hood, a seasonal restaurant, in April. millenniumhotels.com

DEPARTMENT OF NATURAL RESOURCES o assist communities impacted by coastal change, the Division of Geological & Geophysical Surveys is publishing new high-resolution digital aerial photos and elevation data for twenty-six coastal communities in Western Alaska. Continuous data covering the coastline between communities will be released at a later date. This is the first dataset of its kind to cover the Norton Sound and Yukon-Kuskokwim Delta regions and is a huge and sorely needed improvement over the previous sparse, discontinuous, or outdated information. The data will serve as a regional baseline to support coastal flood and shoreline mapping for projects such as FEMA flood mapping, erosion monitoring, and nautical charting and will give communities up-to-date maps showing locations of critical buildings and roads for emergency planning and future development. The new images and data are available at dx.doi.org/10.14509/29548. dnr.alaska.gov

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ALASKAN BREWING laskan Brewing Company is partnering with distributors around the Buckeye state to bring award-winning beer from the Last Frontier to Ohio. Consumers can expect to see flagship Alaskan Amber, invigorating Icy Bay IPA, specialty Hopothermia Double IPA, and more on shelves and on tap by mid-summer. alaskanbeer.com

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TYONEK SERVICES GROUP, INC. yonek Services Group, Inc. announced the acquisition of Selex Galileo’s Avionics System Integration facility in Stennis, Mississippi. The company will be named Tyonek Services Overhaul Facility—Stennis LLC and is expected to create at least twenty-six new jobs over the next two years. tsgi.tyonek.com

MUNICIPALITY OF ANCHORAGE he US House of Representatives unanimously passed legislation introduced by Senator Dan Sullivan and Congressman Don Young to allow for the sale of nine acres of unused and undeveloped federal property to the Municipality of Anchorage.

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S. 1492 facilitates the conveyance of the National Archives and Records Administration property located at 400 East 40th Avenue in Anchorage to the Municipality for no less than fair market value. Muni.org SEALASKA ealaska Heritage Institute has released the first three of eighteen culturallybased children’s books that reflect the Native worldview. The books are part of the institute’s Baby Raven Reads, a program for Alaska Native families with children up to age five that promotes language development and school readiness. The project is based on ample research that has shown the effectiveness of using culturally-based teaching resources and methods to improve academic achievement in Indigenous students. The first three books are geared for children up to age three, and SHI also will produce books for children up to age five in the coming years. sealaskaheritage.org

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BLOOD BANK OF ALASKA lood Bank of Alaska opened their new headquarters located at 1215 Airport Heights Drive in May. The new building project began in 2008 when the current laboratory facility was found to be insufficient for the future needs of patients in Alaska. The new Blood Bank of Alaska services more than twenty-one hospitals across Alaska including the Alaska Native hospitals and military facilities. bloodbankofalaska.org

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BRISTOL BAY NATIVE CORPORATION ristol Bay Native Corporation finalized the purchase of Katmailand, Inc. and its associated assets and operations located

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Your Project, Our Responsibility. 24/7 Service

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

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

Alaska Business Monthly | February 2016www.akbizmag.com


Compiled by Tasha Anderson in Anchorage and King Salmon, as well as within Katmai National Park. The acquisition is effective immediately and includes the Brooks Lodge and Grosvenor Lodge concessions in Katmai National Park and Kulik Lodge on Nonvianuk Lake. bbnc.net ERICKSON rickson Incorporated, a leading global provider of aviation services, has been contracted to provide helicopter transport in support of the Alaska Department of Natural Resources Forest Inventory Analysis project. Under the five-year contract, Erickson will deliver one exclusive-use, light lift helicopter for charter services to an interagency field crew led by the Alaska Department of Natural Resource Division of Forestry, United States Department of Agricultural and United States Forest Service. The crew will establish forestry field plots to analyze and monitor over several years as part of a national program.  ericksoninc.com

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EXTREME FUN CENTER he Extreme Fun Center is now open in Wasilla and ready for the entire family to enjoy. It offers the state’s only indoor race carting center with forty electric cars, laser tag, mini bowling, bumper cars, and arcade, with fresh in-house pizza, salads, panini sandwiches, popcorn, and refreshments. wasilla.extremefuncenters.com

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ALASKA OCCUPATIONAL SAFETY n May 17 Governor Bill Walker signed Senate Bill 148 into law. The legislation brings Alaska’s workplace accident reporting requirements in line with federal standards by requiring notice within eight hours of an employer becoming aware of an incident involving the loss of an eye or an

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amputation. The new law has an immediate effective date. Employers may report accidents in person or by telephone to Alaska Occupational Safety and Health offices in Anchorage, Juneau, or Fairbanks or by calling 1-800-770-4940 or 1-800-3216742 (evenings, weekends, and holidays). gov.alaska.gov AURORA CHILDREN’S DENTISTRY urora Children’s Dentistry announced its grand opening. The practice is located in the A Tower of Providence Alaska Medical Center and will accept patients from infancy through age eighteen, including those with special needs. Aurora Children’s Dentistry will accept most forms of dental insurance, including Denali KidCare, and offer routine check-ups, cleanings, sealings, cavity treatments, and all other services to address any dental concerns parents may have for their children. aurorachildren.com

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ALASKA COMMUNICATIONS laska Communications announced the grand opening of its Business Technology Center, which can be used to collaborate with IT specialists, develop solutions, and experience hands-on demonstrations, or conduct trainings, seminars, and private events. Alaska Communications brings industry-leading solutions for hardware, software, and cloud-based IT services to Alaska businesses through the Center, which has five meeting rooms, all equipped with voice over internet phones, Wi-Fi, LCD display screens, and connectivity for nearly every device. Businesses and nonprofits can make reservations to use the Business Technology Center; two rooms are available on first come-first serve basis at no cost. alaskacommunications.com

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EDISON CHOUEST OFFSHORE lyeska Pipeline Service Co. notified Edison Chouest Offshore (ECO) that Alyeska intends to award ECO its contract for marine tanker escort and spill prevention and response support in Prince William Sound. Alyeska cited ECO’s safety record, in-depth experience and technical capability, management systems, and equipment options as important considerations in its decision to issue the new contract. ECO’s proposal utilizes new equipment to fulfill contractual obligations. The new contract, which will include the Valdez Narrows through Hinchinbrook Entrance, calls for a robust transition plan of approximately twenty-four months in duration. chouest.com

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NOAA cientists from NOAA’s Alaska Fisheries Science Center embarkws from Dutch Harbor May 28 on another busy survey season, off Alaska’s coast, collecting data needed for fisheries managers to determine sustainable fishery harvest levels. This year, they’ll be conducting three groundfish and crab bottom trawl surveys and one midwater acoustic-trawl survey in the Bering Sea. noaa.gov

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AFN he AFN board of directors has selected Emil Notti (Athabascan) and Megan Alvanna Stimpfle (Inupiaq) to deliver the keynote address to the delegates, participants, and observers of the 50th Anniversary of the Annual Alaska Federation of Natives Convention on the first day of the threeday meeting, October 20-22, 2016 at the Carlson Center in Fairbanks. The theme of this year’s convention is “50 Years: Reflect, Refresh, Renew.” nativefederation.org R

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• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

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

620B East Whitney Road I Anchorage, AK 99501 February 2016 | Alaska Business Monthly

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RIGHT MOVES Professional Growth Systems

Professional Growth Systems is excited to welcome Theo Hunt to the consulting team to further develop their regional and national consulting work. Hunt attained her MBA from the University of Alaska Anchorage in 2005. She has spent the last Hunt ten years implementing process improvement and project management tools in a wide variety of organizations. Hunt’s recent work includes a Performance Improvement Coach at RLG and the Improvement Specialist at Southcentral Foundation.

PND Engineers, Inc.

The Board of Directors of PND Engineers, Inc. elected Jim Campbell, PE, President and Dempsey Thieman, PE, SE, Senior Vice President. The Board selected Torsten Mayrberger, PE, Campbell PhD, to be a principal of the firm. Campbell joined PND in 1995 and brings pride and enthusiasm to his new role. Thieman looks forward to helping perpetuate PND’s culture of leadership. Thieman Mayrberger has fifteen years of professional engineering experience and joined PND’s Anchorage office in 2009. He specializes in geotechnical investigations in marine, nonpermafrost, and permafrost soils.

Mayrberger

Olgoonik Inspection Services LLC

Darrell W. Harris is the new General Manager of Olgoonik Inspection Services LLC. Harris is an expert in his field with more than thirty years of experience within energy and power industries including oil, chemical, gas, and nuclear power. His back- Harris ground includes management, inspection, quality assurance, compliance, and structural integrity.

Harris is an experienced inspector; subject matter expert; and a proven manager of projects, people, and resources.

KeyBank

Joseph Murry has been promoted to Enterprise Banker with KeyBank in Alaska, responsible for developing and managing relationships with Key’s largest commercial clients throughout Alaska. Murry is also responsible Murry for partnering with KeyBanc Capital Markets in order to bring Key’s full range of investment banking and capital markets capabilities to Alaska companies. Tracey Thomas has been promoted to the position of Commercial Banking Relationship Manager and Vice President. In her new role, Thomas is responsible for providing financial solutions to large commercial clients, mainTomas taining existing client relationships, and developing new business opportunities throughout Alaska.

Parker, Smith & Feek

Parker, Smith & Feek announced that Jana Smith has been named Managing Partner of their Alaska operations. Smith joined Parker, Smith & Feek in 2006 and has been a Principal of the firm since Smith 2011. With more than twenty-five years of industry experience, she works with some of their most complex clients developing innovative insurance programs.

First National Bank Alaska

First National Bank Alaska Senior Vice President Charlie Weimer was named the bank’s new Branch Lending Administrator; Wasilla Loan Officer Chris Longacre was named Vice President. Anchorage Lending Unit Team Leaders Chad Steadman and Stacy Tomuro were named Regional Unit Managers. Jason Brown is First National’s newest Loan Officer, and Michelle Wamack was promoted to Product Support Manager.

Weimer’s new responsibilities include strengthening lending and deposit services and customer relationships in the communities served by the bank outside the Anchorage area. Weimer’s helped Alaskans meet Weimer their banking goals for more than thirty-two years. Longacre joined the First National team in 2005 and has helped his customers get to new financial heights ever since. As a Vice President, Longacre will continue to foster new business Longacre relationships and make sound loans to existing customers. Steadman holds a degree from Utah State University in finance with minors in financial planning and economics. Steadman has a diploma from the Graduate School of Banking at LSU and Steadman was commercial banker of the year for his organization in 2008. Tomuro was one of the 229 banking professionals from thirty-one states to graduate from the prestigious Pacific Coast Banking School in 2015. Tomuro began working in the financial Tomuro industry nearly thirty years ago and joined First National in 2001. Brown will provide customers lending services to meet their financial needs. Brown joined the bank’s Management Associate Program in January 2015 after working many years in civil con- Brown struction. Wamack responds to all credit and debit fraud claims and disputes. Wamack’s new duties include printing and delivering cards on time, handling requests from commercial card administrators, posting payments Wamack accurately, reconciling network billing, and regularly updating online credit card banking.

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Compiled by Tasha Anderson National Park Service

Ben Bobowski, the acting superintendent for Rocky Mountain National Park in Colorado, has been selected as the new superintendent at Wrangell-St. Elias National Park and Preserve. Bobowski earned a Bachelor of Bobowski Science Degree from Rutgers University focused on forestry and wildlife management, and Masters of Science and PhD degrees from Utah State University, focused in range science.

Office of the Governor

Governor Bill Walker named Walt Monegan the new Commissioner for the Department of Public Safety. Monegan joins the WalkerMallott administration with an extensive career in Alaska’s public safety and criminal justice Monegan sectors, including more than thirty-three years with the Anchorage Police Department, with five years as Chief of Police.

Manley & Brautigam, PC

Sandon Fisher has joined Manley & Brautigam, P.C. law firm as an Associate Attorney. Sandon’s practice focuses on business and estate planning, entity formation, mergers and acquisitions, transactional law, and estate and probate matters. He earned his BS degree Fisher in Government and his law degree from Liberty University in Virginia. He was admitted to the Alaska Bar in December 2015.

R&M Consultants, Inc.

R&M Consultants, Inc. has added welding inspection to their line of services with the addition of Justin Keplar, CWI, to their Anchorage office team. Keplar is an American Welding Society certified welding inspector and Keplar joined R&M’s Materials Laboratory and Special Inspection Department as a Special Inspector in March.

Habitat for Humanity

Habitat for Humanity has appointed Elaine Phillipps to serve as its new Executive Director. Phillipps brings more than twelve years of nonprofit experience to Habitat for Humanity. She served as executive director for Muscular Dystrophy of Phillipps Alaska and was a co-founder and executive director of Love INC Anchorage.

Kumin

Kumin has added Eileen Elento to their design team as CAD Drafter. Elento’s education includes coursework at the Art Institute of Seattle, majoring in Interior Design. She also holds an Associate of Applied Science in Architectural Elento & Engineering Technology from UAA. Elento’s work experience includes serving as AutoCAD/Revit technician for UAA; draftsperson for Dimond Center Holdings LLC, where she worked closely with architectural staff; and design intern for Brandt Design Group in Seattle, with a focus on residential projects.

Heidi Moes, Senior Vice President, Operations Manager Item Processing and Loan Support Services, was hired in December 2001 as a loan servicer. She has been in banking for nearly eighteen years, most of her time spent in lending Moes operations. Moes coordinates a bankwide food and toy drive around the holidays. Linda Uttech, Senior Vice President, Facilities Manager, has been with Northrim Bank since 2012. In 2015 Uttech managed the Lake Otis Community Branch build, Ketchikan Financial Center renovation, and the Northrim Uttech Building remodel. Douglas Frey, Vice President, Security and Business Continuity Manager, joins after serving with the Department of Defense for thirtyfour years. Most recently, he was a senior anti-terrorism and security policy analyst at the Headquarters Frey of US European Command in Stuttgart, Germany. Frey holds a Bachelor’s Degree in Homeland Security from American Public University.

Northrim Bank

Northrim Bank announced the promotion of four bank officers to the level of Senior Vice President and the hiring of a new Vice President. Katie Bates, Senior Vice President, Electronic Delivery Channel Manager, joined Northrim in 2001 as a branch operations specialist. Bates joined the Electronic Banking department and was promoted to electronic banking Bates manager in 2007 and later was promoted to electronic delivery channel manager in 2012. Barb Ervin, Senior Vice President, Core Applications Group Manager, has been with Northrim Bank since 2002. Prior to joining the IT department, Ervin managed significant aspects of the Bank’s branch administration and operaErvin tions. She has more than thirty-five years of experience in banking and finance.

Interior Gas Utility

The Interior Gas Utility Board of Directors unanimously voted to hire Jomo Stewart as the first General Manager of the utility. From 2005 to 2007, Stewart served as the Communications Director for the Alaska Gasline Port Authority and was a member of the FNSB Platting Commission from 2006 to 2008. He is a graduate of the University of Alaska Fairbanks with a degree in Political Science.

Resource Data, Inc.

Resource Data, Inc. hired Robin Mason as a Programmer/ Analyst. Mason received a BA in Mathematics from the Northern Arizona University in Flagstaff, Arizona, and has several certifications including MCSE, MCT, CCNP, Mason and CAN, as well as ArcGIS I & II training. Mason also has experience as a Senior Network Engineer and owned Forget Me Knots Yarn Store for three years. R

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Accolades

The Alaska Department of Transportation and Public Facilities is pleased to announce Nicholas Mastrodicasa has been awarded the US Geological Survey’s Henry Gannett Award. This national award recognizes distinguished contributions to the topographic mapping of the United States. The US Chamber of Commerce named HooDoo Brewing Company a Blue Ribbon Small Business Award winner. The annual program recognizes companies for their dedication to the principles of free enterprise and contributions to restoring jobs and supporting economic growth. The Council on Occupational Education, a national agency for accrediting career and technical education, recently reaffirmed AVTEC’s accreditation for another six years. The mission for the Council on Occupational Education is “assuring quality and integrity in career and technical education.” Representatives of the Council on Occupational Education conducted an on-site evaluation to ensure AVTEC has maintained quality programs and continues to meet standards and conditions for accreditation. AECOM, a premier, fully integrated global infrastructure firm, was named to Fortune magazine’s list of the World’s Most Admired Companies for the second consecutive year. From an annual survey conducted by Fortune and global management consulting firm Korn Ferry Hay Group, top executives, directors, and financial analysts identify the companies with the strongest reputations within their industries and across industries. R&M’s Senior Land Surveyor John Bennett, PLS, SR/WA, has been inducted into the 2016 Alaska Surveying & Mapping Conference Hall of Fame, a program that honors the exemplary contributions of surveying and mapping professionals in Alaska. The Alaska Food Policy Council awarded its first Food Hero awards at its semi-annual Food Festival & Conference. The awards were presented to Kyra Wagner for her individual contributions to Alaska’s food system and to the Tyonek Tribal Conservation District for its Tyonek Grown project and other efforts to strengthen the food system in Tyonek. The Council also presented Governing Board member Diane Peck an award for Outstanding Service to the organization. Alyeska Pipeline Service Company was recognized as one of the World’s Most Ethical Companies for the fifth year in a

NEW!

Compiled by Tasha Anderson row, as was Granite Construction, a seven-time award winner. The Ethisphere Institute announced its selections and honored recipients at the 2016 World’s Most Ethical Honoree dinner in New York City. Companies are evaluated in five key categories: ethics and compliance program; corporate citizenship and responsibility; culture of ethics; governance; and leadership, innovation, and reputation. The Association of Fundraising Professionals Alaska Chapter was named a 2015 Ten Star GOLD Chapter and has earned the 2015 Friends of Diversity Designation. Chapters receive the Ten Star Award for increasing professionalism within fundraising and public awareness about the importance of philanthropy. Chapters who achieve the Ten Star Gold Award have demonstrated outstanding programming and leadership. Adventure Green Alaska, the only sustainable tourism certification program for tourism businesses operating in Alaska, announced its first certification recipients for 2016: Alaska Alpine Adventures, Alaska Mountain Guides, Alaska Nature Guides, Alaska Stillpoint Lodge, Denali Education Center, DIPAC/Macaulay Salmon Hatchery, Great Alaska Adventures, and Orca Island Cabins. Adventure Green Alaska encourages tourism businesses to evaluate their operations and determine whether they use—or could be using—best management and sustainability practices. Anchorage School District Superintendent Ed Graff was recognized with the Exemplary Social and Emotional Learning Leadership Award from CASEL, the Collaborative for Academic, Social and Emotional Learning. This award has only been given twice before, to former ASD Superintendent Carol Comeau in 2011 and Nashville Metropolitan School District Director of Schools Dr. Jesse Register in 2015. Umialik Insurance Company announced Anchorage-based Denali Alaskan Insurance has been named the company’s 2016 Commercial Lines Agency of the Year. The award is presented annually to recognize the agency that has demonstrated the most outstanding performance, growth, and partnership in those lines of business over the past year. In addition, Umialik announced that Denali Alaskan Insurance has also been named to its list of 2016 Circle of Excellence Agency Partners, recognizing the agency’s longer-term success and partnership with Umialik. The 2016 Young People of Achievement Honorees, Alaskan

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youths age 16-18 who have made efforts towards fulfilling the mission of YWCA Alaska (eliminating racism and empowering women while promoting dignity, peace, freedom and justice for all), are: Aurea “Lucy” Paredes (Service HS), Awar Mou (East HS), Brennan Daniels-O’Neal (Bartlett HS), Catherine Currier (Wasilla HS), Darrian Traw (Service HS), Hannah Nelson (Eagle River HS), Julius Reed (West HS), Kao Lee Xiong (Bartlett HS), Lorenzo Davis (Barlett HS), and Manoah “Brother” James (West HS). Alaska USA Foundation has donated $10,000 to Greater Hope Foundation to support the Parent Child Interaction Therapy program, which provides much needed quality counseling for families. Alaska Business Monthly magazine has been named a 2015 All Star Award winner by Constant Contact, Inc. The annual award recognizes the most successful 10 percent of Constant Contact’s customer base, based on their significant achievements leveraging online marketing tools to engage their customer base and drive results for their organization. Two Anchorage School District students were selected as third quarter winners in the Drive for Perfect Attendance Recognition Program. Andrew Xayasone, a tenth grader from Service High School, was awarded 25,000 Alaska Airlines Miles courtesy of GCI. Monet Reimers, a seventh grader from Northern Lights ABC School, received an iPad from GCI. The program, which recognizes Anchorage School District students each quarter for their attendance achievements, is in its third year. Alaska USA Insurance Brokers is the recipient of three distinguished awards. Safeco Insurance awarded the Alaska USA Insurance Brokers with the Safeco Premier Partner Program award, which recognizes outstanding performance and partnership. In addition to the Safeco award, Alaska USA Insurance Brokers also received the Circle of Excellence distinction and the Alaska Personal Lines Agency of the Year award on behalf of Western National, a parent company of Umialik Insurance. The Circle of Excellence distinction recognizes overall performance for the book of business, growth and loss performance while the Alaska Personal Lines Agency of the Year is awarded to agencies that show exceptional overall growth. Patsy Perkins of Fairbanks and Patty Miller of Kenny Lake competed with 4-H leaders nominated from twelve other Western states. Perkins received the Salute to Excellence Outstanding Lifetime Volunteer award, and Miller was recognized as the Volunteer of the Year, an award for leaders with ten years or less work with 4-H.

Chugach Electric Association was presented with the Governor’s Innovation in Safety Award for a product conceived and designed by Chugach employees. The Innovation in Safety Award is presented to a company or group that has demonstrated excellence in innovation in safety and health systems that protect employees. Alyeska Pipeline Service Company was recognized with a Governor’s Safety Award of Excellence for the second year in a row. This award is presented to groups demonstrating excellence in safety and health systems that protect their employees in the workplace and promote corporate citizenship. The Aleutian Pribilof Island Community Development Association and the Aleut Corporation announced that Josh Good, a fifth-grade teacher from Unalaska, is the 2016 Aleutian Marketplace Business Plan Competition winner. Josh received $20,000 in seed money start-up funds for his Unalaska Brewing Company business plan submission. A team of five University of Alaska Fairbanks geoscience and engineering graduate students won first place and $1,000 at a regional 2016 Imperial Barrel Awards competition. They advanced to the international IBA competition in Calgary, Alberta, Canada, in June. The University of Alaska Fairbanks School of Management honored Bob Hajdukovich as its 40th business leader of the year during a sold-out dinner and award ceremony April 23 at the Westmark Fairbanks Hotel Gold Room. The International Association of Maritime and Port Professionals (IAMPE) announced its latest class of maritime professionals to complete the IAMPE Professional Management Certification Program: Receiving the professional designation of Certified Maritime Port Executive (CMPE) were Stephen Ribuffo, CMPE, Port Director of the Port of Anchorage and Tim Dressel, CMPE, Director of Information Technologies for the Port of Prince Rupert. Receiving the Maritime Port Executive (MPE) Certifications were Stuart Greydanus, MPE; Todd Cowles, MPE; Sharen Walsh, MPE; and Cheryl Beckham, MPE all from the Port of Anchorage as well as Jim Jager, MPE, of the Municipality of Anchorage; Therese Dolan, MPE, from Port MacKenzie; Alan Sorum, MPE, from the Prince William Sound Regional Citizens’ Advisory Council; Jeremy Talbot, MPE, from the Port of Valdez; Jim Hunt, MPE, from the Port of Seward; Ron McPherson, MPE, and Joseph Scarborough, MPE, from HDR (Alaska and Houston offices respectively). Completing the management program and receiving the Maritime Port Management Certification was Cynthia Lowe, MPM, from HDR (Alaska). R

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131


MADE IN ALASKA

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he Alaska Department of Commerce, Community & Economic Development manages the Made in Alaska program; its mission is “to promote products made, manufactured, or handcrafted in the state.” This includes products made for industry use or for retail sale. On the industry side, an Alaska Building Products Directory can be found online (commerce.alaska.gov/web/ded/DEV/MadeInAlaska.aspx) that includes slate, windows and glass, cabinets and woodwork, countertops, wood products, steel, roofing, insulation, cabins, decorative accents, salvage, and concrete, sand, and gravel. For Alaskans or Alaska’s traveling guests looking to find and support local industry, keep a sharp eye out in gift shops and stores across Alaska for the Made in Alaska logo, which can only be placed on products that meet the program’s 51 percent or more produced in Alaska criteria. Below Alaska Business Monthly has compiled just a few examples of plethora of Made in Alaska businesses and products. For a complete listing of the nearly 1,200 registered businesses, please visit the Alaska

132

By Tasha Anderson Department of Commerce, Community & Economic Development’s website.

Agloolik’s Cache Agloolik’s Cache sells Alaska wine charms, fishing magnets, earrings, and key chains, with hand-tied fishing flies. The artist, Deborah Buring, grew up in Fairbanks and Juneau and now resides in Anchorage. Her pieces can be found at stores in Anchorage, Haines, and Talkeetna, as well as online. (agloolikscache.com) Kittiwake Clothing Company Kittiwake Clothing designs are all hand drawn and screened in Anchorage, and hats are hand knit using local yarns and patterns created by Owner/Artist Kathleen Yackel. Kittiwake products can be found at stores in Anchorage, Eagle River, Girdwood, Homer, Ketchikan, Valdez, and Fairbanks. Custom design work is available upon request. (kittiwakeclothing.com) Alaska Glacial Mud Co. Alaska Glacial Mud Co. produces a variety of products for face and body care, including

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mud masques and powders and exfoliating bar soap made from glacial mineral mud harvested from the Copper River Delta. The company is located in Cordova, but its products are sold throughout Alaska in more than forty locations, as well as online. (alaskaglacialmud.com) Wheelhouse Pottery Shirley Odsather is the owner and artist for Wheelhouse Pottery, which is located in Fairbanks. Odsather finds and experiments with natural Alaska and Yukon territory clays to create mugs, trays, bowls, vases, butter keepers, and other ceramic items. Wheelhouse Pottery items can be found at one Palmer and four Fairbanks locations, as well as at the Tanana Valley State Fair each year. (wheelhousepottery.com) Qiveut Deisgns Qiveut Designs is owned by Margaret Rye, who weaves, knits, and dyes custom qiviut garments in her Mat-Su in-home studio. Qiviut is the soft under wool of the Arctic Musk Ox, which is hand-gathered from wild and domesticated animals. Qiveut products are available online and in the summer months at the Downtown Saturday Market and Festival in Anchorage. (qiveut.com) R

Alaska Business Monthly | July 2016www.akbizmag.com


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Alaska 4 communities celebrate Independence Day JULY

Food, music, parades, and fireworks. Check out TravelAlaska. com, Anchorage.net, ExploreFairbanks.com, and other local community websites for what’s going on at your Fourth of July travel destination.

Latin influences and guest chef Aaron Gilman of Seven Glaciers Restaurant at Alyeska Resort. homeralaska.org

JUL-AUG

Antony and Cleopatra

and vice, transcendent 22-14 Virtue love, and politics combine in Antony and Cleopatra, Shakespeare’s greatest exploration of sex and power, all expressed in a magnificent tragedy of this fascinating Queen of Egypt and the Roman who loved her. Cyrano’s; Thursdays, Fridays , and Saturdays 7 p.m., Sundays 3 p.m. cyranos.org JULY

Arctic Thunder

Show 30-31 Air The 2016 Arctic Thunder Air Show and Open House is open to the public and admission is free. Joint Base Elmendorf-Richardson, alaskaairshow.org

Cordova JULY

Copper River Wild! Salmon Festival

15-16 Celebrate salmon and

promote the health and sustainability of local salmon runs through art, music, road races, educational activities, and the Taste of Cordova Salmon Cook-Off. Mt. Eyak Ski Hill. copperriverwild.org

Eagle River JULY

Bear Paw Festival

Events at this annual festival include the Slippery Salmon Olympics, the Running of the Bears, human foosball, Teddy Bear Picnic, classic car show, parade, carnival rides, and the I-Did-A-Duck race. bearpawfestival.org

6-10

Fairbanks JULY

Alaska State Square Dance Festival

1-4 This is the 50th annual square dance festival and includes workshops, evening dances, and square and round dancing. Far North Square and Round Dance Center. wesquaredance.com/ Flyers/Alaska/index.pdf JULY

Golden Days

Fairbanks’ gold rush 16-24 Celebrate history with a parade, historic reenactments, rubber duckie race and more. Golden Days also includes a parade, street fair, comedy night, barbeque championships, and a river www.akbizmag.com

regatta which is not a river race, but a flotilla where winners are judged on creativity and integration of the Golden Day’s theme “For the Love of Gold.” fairbankschamber.org/golden-days JULY

17-31

Fairbanks Summer Arts Festival

Sing, play, dance, paint, cook, learn, listen, relax, write, stretch, and watch at this multi-discipline study performance festival offering workshops, master classes, and performances. fsaf.org JULY

World Eskimo-Indian

20-23 Olympics Athletes compete in

traditional games and celebrate through pageants, dances, and Native arts and crafts. Carlson Center. weio.org

Girdwood JULY

Girdwood Forest Fair

The Forest Fair features hand-crafted items, exotic foods, and entertainers from all over Alaska, along with the annual Forest Fair Parade at 10 a.m. on Saturday. Limited parking is available at the Alyeska Resort daylodge with shuttle service provided. Girdwood Fairgrounds, Mile 2.2 Alyeska Highway; Friday and Saturday 11 a.m. to 8 p.m. and Sunday 11 a.m. to 6 p.m. girdwoodforestfair.com

1-3

Haines JULY

Southeast Alaska State Fair

28-31 The fair includes a parade, exhibits, a logging show, live music, horseshoe tournament, fun-run, kids’ stage, amusement rides, vendors, food, entertainment, live animals, and puppet shows. Southeast Alaska Fairgrounds. seakfair.org

Seward JULY

JULY

9

Palmer Garden & Art Midsummer Faire

The Palmer Midsummer Garden and Art Faire is a celebration of local art, gardening, food, and music. This annual event showcases the best of what the Mat-Su Valley has to offer and continues to grow each year. Downtown Palmer, 10 a.m. to 6 p.m. palmergardenandart.org

Soldotna JULY

Cardboard City

to spend the night in a temporary shelter—a cardboard box. This event’s purpose is to raise awareness of homelessness and to raise money for Family Promise Mat-Su. Alaska State Fair Grounds at the Green Gate, 5 p.m. to 8 a.m. familypromisematsu.org

Palmer Pride Picnic

Celebrate the pride in downtown Palmer with a free picnic hosted by Palmer businesses and the City of Palmer. Palmer Pride hotdogs, farm fresh veggies, live music, and Citizen of the Year award presentations. Palmer Railroad Depot, 4 p.m. to 6 p.m. palmerchamber.net

22

Soldotna Progress Days

community event 23-24 This includes a parade, family

goal of Cardboard City 15-16 The is to find people willing

JULY

Mount Marathon

From its start as a bet between two locals in 1915, the Mount Marathon race has become iconic. Competitors race from downtown to the top of Mount Marathon and back in both open and junior divisions. Downtown Seward, 10 a.m. mmr.seward.com

4

Palmer

JULY

Anchorage

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Compiled by Tasha Anderson

activities, dutch oven competition, the Sawfest Chainsaw Carving Competition, food and craft vendors, live music, and a free community picnic. Soldotna Creek Park. visitsoldotna.com

Wrangell JULY

Bearfest

festival celebrating the 27-31 This bears of Alaska includes street games, a Salmon Bake, jam sessions, bear symposium, bear country workshops, live music, a photo contest, wildlife photography workshops, a golf tournament, a marathon, and community market. James and Elsie Nolan Center. wrangell.com R

Alaskans serving Alaskans. Oxford is the only gold refiner with two locations in Alaska for over 35 years. We offer maximum returns on gold and silver. Oxford provides the service and value Alaskans have counted on for generations.

Homer JULY

22-23

Halibut Cove Live presents The Paperboys

Halibut Cove Live is a unique boating, musical, dining experience from start to finish which exemplifies art amongst nature’s splendor. The first performances of the season feature The Paperboys, a fun alternative rock group from Vancouver, Canada, with Jazz, Celtic, and

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July 2016 | Alaska Business Monthly

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EVENTS CALENDAR JULY 2016

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Business Events

Compiled by Tasha Anderson

JULY

JUL

Alaska Business Week

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

16-23

Youth JULY Afognak Charity Golf Tournament

28

Anchorage Golf Course: Sponsorship and tournament fees, after event expenses, will directly benefit Afognak youth education programs operated by the Native Village of Afognak and the Native Village of Port Lions Tribes on Kodiak Island. afognak.com/golf

AUGUST

AUG

11th Annual Renewable Energy Fair

Chena Hot Springs Resort: The Renewable Energy Fair is designed to educate the public on topics related to renewable energy and sustainability. This year’s theme, “Thinking Green and Keeping It Clean!” will be centered around a landfill-free environment. chenahotsprings.com

14

AUG

ICETECH 16

Hotel Captain Cook, Anchorage: The Arctic Section of the Society of Naval Architects and Marine Engineers together with Alaska’s Institute of the North is now well on the way to staging the premiere international conference on ships and structures in ice. icetech16.org

15-18 AUG

Aleutian Life Forum

Unalaska: Aleutian Life Forum is a conference gathering of national, state, and regional scientists; industry stakeholders; community leaders; and local knowledge to promote resilient coastal communities. aleutianlifeforum.com

16-20 AUG

AML Annual Summer Conference

Anchorage: The Alaska Municipal League Board of Directors, Alaska Conference of Mayors, Alaska Municipal Management Association, and Legislature meet to work on AML policies and platform and to conduct business for each group. akml.org

17-19 AUG

21-23

NTCA Northwest Regional Conference

Hilton Hotel, Anchorage: NTCA–The Rural Broadband Association is the premier association representing nearly nine hundred independent, community-based telecommunications companies that are leading innovation in rural and small-town America. ntca.org

AUG

23-25

2016 Alaska Chapter of ASA Annual Conference

Alaska Pacific University, Anchorage: The meeting features a workshop on “Bayesian Inference in Stan” by Daniel Lee, a research scientist from Columbia University. community. amstat.org/alaskachapter 134

SEPTEMBER Association of REALTORS SEPT Alaska Convention

14-17

Centennial Hall, Juneau: The annual convention includes keynote and guest speakers and opportunities for ECE credits. alaskarealtors.com

Recreation & Park SEPT Alaska Association Conference

15-16

Petersburg: This year’s theme is “Rising Together,” and they keynote speaker is Greg Morton, a corporate strategy and growth development specialist. alaskarpa.org

Fire Conference SEPT Alaska Fairbanks: Includes training, work-

19-24

shops, lectures, and a firefighter competition. The 2015 theme is “Leading the Way.” alaskafireconference.com

Oil & Gas Congress SEPT Alaska The Congress includes critical market

21-22

assessments, the latest information from key industry players, and information on key issues impacting Alaska’s energy future. alaskaoilandgascongress.com

Superintendents SEPT Alaska Association Fall Conference

22-24

Wasilla: The pre-conference takes place September 21. alaskaacsa.org

Alaska Annual Conference SEPT Museums Juneau: This year’s conference theme is

22-24

“Mission Possible: Creating Opportunity.” museumsalaska.org

Writers Guild/SCBIW SEPT Alaska Annual Conference

23 & 27

BP Energy Center: Two full days of breakouts, keynotes, and panels, plus optional intensives, manuscript reviews, a juried illustrator portfolio display, and of course a Saturday children’s literature rack in association with the Society of Children’s Book Writers and Illustrators. alaskawritersguild.com

Annual Conference SEPT AAHPA Unalaska/Dutch Harbor: This is

26-30

the annual conference of the Alaska Association of Harbormasters & Port Administrators. alaskaharbors.org

Snow Symposium SEPT Alaska Dena’ina Center, Anchorage: A one-day

27

trade show for the snow and ice management industry brought to Alaska by the Snowfighters Institute. alaskasnowsymposium.com

Business Monthly’s SEPT Alaska Top 49ers Luncheon

28

Dena’ina Center, Anchorage: Alaska Business Monthly’s annual luncheon honoring the Top 49 Alaska companies ranked by gross revenue. Contact: Ana Lavignino, 907-276-4373, accounts@akbizmag.com, akbizmag.com

OCTOBER

OCT

ATIA Annual Convention & Trade Show

OCT

All-Alaska Medical Conference

Anchorage: The Alaska Travel Industry Association is the leading nonprofit trade organization for the state’s tourism industry. alaskatia.org

3-6

Wedgewood Resort, Fairbanks: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

6-8

OCT

11-12

Alaska Coalition on Housing and Homelessness Conference

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

OCT

12-14

Alaska Chamber Policy Forum and Conference

Kenai: The state’s premier business conference, open to the public. Traditionally held in the fall, the Conference draws 200-225 attendees and features keynote speakers, panel discussions, and breakout sessions on issues of statewide concern to Alaska business. alaskachamber.com

OCT

20-22

Alaska Federation of Natives Annual Convention

Fairbanks: Annual gathering of Alaska Native peoples to discuss current news and events on a state, national, and international level. This year’s theme is “50 Year: Reflect, Refresh, Renew.” nativefederation.org

NOVEMBER

NOV

9-12

Associated General Contractors of Alaska Annual Conference

AGC of Alaska i s a nonprofit construction trade association dedicated to improving the professional standards of the construction industry. agcak.org

NOV

AASB Annual Conference

NOV

AAMC Conference

Anchorage Hilton: The mission of the Association of Alaska School Boards is to advocate for children and youth by assisting school boards in providing quality public education, focused on student achievement, through effective local governance. aasb.org

10-16

Hotel Captain Cook, Anchorage: The Alaska Association of Municipal Clerks is an organization that focuses on providing educational training and mentoring and professional growth opportunities. alaskaclerks.org

13-15 NOV

14-18

Annual Local Government Conference

Anchorage: The Alaska Municipal League is a voluntary, nonprofit, nonpartisan, statewide organization of 162 cities, boroughs, and unified municipalities, representing over 97 percent of Alaska’s residents. akml.org R

Alaska Business Monthly | July 2016www.akbizmag.com


ALASKA TRENDS

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By Nolan Klouda and Khristian Viray

The Telecom Industry: An Economic Powerhouse?

f you ask average people on the street what drives Alaska’s economy, they probably won’t hesitate to say oil, and they would be correct. Of course, the state has other areas of economic specialization, which include such classic Alaska categories as fisheries, mining, and tourism; however, another area of specialization is more surprising: the telecommunications industry. One way to measure a state’s economic specialties is an indicator known as a location quotient, or LQ. Economists calculate LQs by comparing employment in a given industry category within a state to the same category at the national level. An LQ of 1.0 means the same share of the workforce is employed in that sector as the national average; a figure of 2.0 means employment in the sector is double the national average. Oil and gas extraction, for instance, has an LQ of 9.75, meaning Alaska employment in this sub-sector is almost ten times higher than the United States as a whole. Air transportation sits at 5.97, while at the other end of the spectrum, machinery manufacturing barely registers with an LQ of 0.03 (figures based on 2014 data from the Bureau of Labor Statistics, Quarterly Census of Employment and Wages). So where does telecommunications fall? Taken as a whole, the sector weighs in at a respectable 2.22, or more than twice the national average. By way of comparison, the figures for Wyoming and Vermont (the only two states with smaller populations than Alaska) are 1.02 and 0.67 respectively. As of 2014 (the most recent fullyear data available from Bureau of Labor Statistics) the telecom

sector employed 4,145 people in the state—more than Vermont and Wyoming combined. According to data from IMPLAN, an economic impact software, telecommunications contributed about $384 million in household income in 2014, or an average of about $90,000 per industry employee. Furthermore, IMPLAN figures indicate that each dollar in sales earned by in-state wireless carriers produces about $2.00 in value to the Alaska economy (measured by wages, profits, and tax receipts). In other words, the telecom sector punches well above its weight. What accounts for this economic strength? One possibility is the relatively isolated nature of the state telecom market. Many (if not most) Lower 48 consumers get their cell phone, broadband, and cable TV services from multi-state providers, so money spent on these services often flows to another state. Alaska is somewhat unique in having strong in-state providers who employ Alaskans and keep the money circulating locally. Of course, industries change over time and the state telecom market has become much more competitive in the last few years, particularly in the wireless realm. What this means for telecommunications employment moving forward is not yet clear, but certainly worth watching closely. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

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Alaska I California I Hawaii DEADHORSE OFFICE Pouch 340079, Prudhoe Bay, AK 99734 (907) 659-9010 July 2016 | Alaska Business Monthly

135


ALASKA TRENDS

Indicator

By Khristian Viray

Units

Period

GENERAL Per Capita Personal Income—Alaska US $ 4thQ15 Per Capita Personal Income—United States US $ 4thQ15 Consumer Prices—Anchorage 1982-1984 = 100 2ndH15 Consumer Prices—United States 1982-1984 = 100 2ndH15 Bankruptcies Alaska Total Number Filed April Anchorage Total Number Filed Fairbanks Total Number Filed Labor Force in Alaska Thousands April Unemployment Rate Alaska Percent April United States Percent April Employment Alaska Thousands April Anchorage/Mat-Su Region Thousands April Anchorage, Municipality Thousands April Interior Region Thousands April Fairbanks North Star Borough Thousands April Southeast Thousands April Juneau, City and Borough Thousands April Northern Region Thousands April Gulf Coast Thousands April Southwest Region Thousands April Sectorial Distribution—Alaska Total Nonfarm Thousands April Goods-Producing Thousands April Mining and Logging Thousands April Mining Thousands April Oil & Gas Thousands April Construction Thousands April Manufacturing Thousands April Seafood Processing Thousands April Service-Providing Thousands April Trade, Transportation, Utilities Thousands April Wholesale Trade Thousands April Retail Trade Thousands April Food & Beverage Stores Thousands April General Merchandise Stores Thousands April Trans/Warehouse/Utilities Thousands April Air Transportation Thousands April Information Thousands April Telecommunications Thousands April Financial Activities Thousands April Professional & Business Svcs Thousands April Educational & Health Services Thousands April Health Care Thousands April Leisure & Hospitality Thousands April Accommodation Thousands April Food Svcs & Drinking Places Thousands April Other Services Thousands April Government Thousands April Federal Government Thousands April State Government Thousands April State Education Thousands April Local Government Thousands April Local Education Thousands April Tribal Government Thousands April PETROLEUM/MINING Crude Oil Production—Alaska 136

Millions of Barrels

April

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

55,936.0 48,208.0 216.7 237.7

55,818.0 47,929.0 217.1 236.2

54,863.0 46,730.0 216.8 237.0

2.0% 3.2% -0.0% 0.3%

47.0 33.0 13.0 355.9

30.0 25.0 2.0 355.7

39.0 31.0 5.0 359.7

20.5% 6.5% 160.0% -1.1%

6.9 5.0

7.3 5.0

6.6 5.4

4.5% -7.4%

331.1 188.6 147.9 48.1 42.8 33.1 16.0 9.5 34.4 17.2

329.9 187.9 147.4 47.3 42.3 32.3 15.8 9.8 34.1 18.2

335.5 190.1 149.1 48.9 47.7 33.9 16.4 10.4 34.8 17.2

-1.7% -1.2% -1.1% -3.3% -11.3% -4.7% -3.7% -5.8% -2.0% 5.8%

330.7 43.1 15.4 15.3 12.4 15.4 12.3 9.1 287.6 64.9 6.4 37.8 6.0 10.7 20.7 5.7 6.1 4.1 12.1 28.4 49.2 36.0 31.8 7.2 20.3 11.5 83.6 15.1 25.6 8.2 42.9 24.3 3.7

327.2 43.0 15.5 15.4 12.5 14.6 12.9 9.1 284.2 63.5 6.2 37.5 6.0 10.6 19.8 5.4 6.1 4.1 12.2 28.3 49.1 35.9 30.5 6.8 19.6 11.6 82.9 15.0 25.4 8.1 42.5 24.0 3.6

333.4 47.7 17.8 17.6 14.6 16.9 12.5 8.7 286.0 63.4 6.5 36.3 5.7 10.3 20.6 5.7 6.3 4.3 11.8 29.8 47.3 34.5 31.7 6.8 20.7 11.7 84.0 14.7 26.9 8.6 42.0 24.2 3.5

-1.9% -9.9% -12.9% -12.5% -14.4% -13.6% 3.2% 4.6% -0.6% 0.2% -4.6% 3.3% 5.3% 2.9% -3.9% -5.3% -3.2% -4.7% 3.4% -5.0% 3.8% 4.1% -3.8% 0.0% -5.3% -0.9% -1.3% 2.0% -5.6% -5.8% 1.2% -0.8% 2.9%

14.6

15.8

15.2

-3.9%

Alaska Business Monthly | July 2016www.akbizmag.com


ALASKA TRENDS

By Khristian Viray

Indicator

Units

Period

Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices

Billions of Cubic Ft. $ per Barrel

April April

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

7.4 41.7

7.6 38.1

7.9 58.4

-6.3% -28.6%

Active Rigs April Active Rigs April $ Per Troy Oz. April $ Per Troy Oz. $ Per tonn April

7.0 420.0 1,280.1 17.9 1,855.4

10.0 464.0 1,235.3 15.4 1,801.7

11.0 932.0 1192.20 16.5 2,212.7

-36.4% -54.9% 7.4% 8.2% -16.1%

Millions of $ March Millions of $ Millions of $ Millions of $

73.6 10.4 31.1 32.0

20.7 4.5 13.7 2.4

53.5 13.5 34.9 5.5

37.6% -23.0% -10.9%

Dollars 4thQ15 Dollars Dollars

277,338.0 188,235.0 697,162.0

287,606.0 190,451.0 458,177.0

271,398.0 189,752.0 397,748.0

2.2% -0.8% 75.3%

Dollars Dollars

230,430.0 163,119.0

229,493.0 149,952.0

234,098.0 156,479.0

-1.6% 4.2%

Units Units Units

134.0 7.0 203.0

186.0 19.0 97.0

151.0 9.0 122.0

-11.3% -22.2% 66.4%

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

Thousands April Thousands

357.7 72.1

405.8 97.4

352.90 66.7

1.4% 8.1%

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

Millions of $ April Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

53,161.3 53,999.6 194.7 672.2 79.5 121.1 317.9

52,469.3 53,144.5 585.3 2,107.1 203.9 117.1 1,552.2

54,273.3 55,353.1 333.9 367.5 -21.6 152.4 592.4

-2.0% -2.4% -41.7% 82.9% 199.8% -20.5% -46.3%

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

Millions of $ 1stQ16 Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

6,281.1 323.6 146.6 3,014.6 21.0 5,439.0 4,701.6 2,014.1 2,687.4

6,240.2 230.2 145.1 3,024.5 22.5 5,420.3 4,275.3 1,895.6 2,379.7

5,913.90 222.57 151.28 2,866.23 19.95 5,109.57 4,334.37 1,779.18 2,555.19

6.2% 45.4% -3.1% 5.2% 5.3% 6.4% 8.5% 13.2% 5.2%

REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Government Average Loan in Housing Market Statewide Single-Family Condominium Multi-Family Refinance Average Loan Statewide Single-Family Condominium New Housing Built Statewide Single-Family Mobile Home Multi-Family

FOREIGN TRADE Value of the Dollar In Japanese Yen Yen April 110.0 112.5 119.49 In Canadian Dollars Canadian $ 1.3 1.3 1.24 In British Pounds Pounds April 0.7 0.7 0.67 In European Monetary Unit Euro 0.9 0.9 0.93 In Chinese Yuan Yuan 6.5 6.5 6.11 Notes: 1. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska. 2. Information oh housing is retrieved from AHFC website. www.akbizmag.com

-7.9% 1.6% 1.5% -5.4% 6.2%

July 2016 | Alaska Business Monthly

137


ADVERTISERS INDEX Advanced Physical Therapy of Alaska......107 AE Solutions Alaska LLC....................................116 Alaska Coastal Catering LLC..............................55 Alaska Directional LLC.......................................123 Alaska Distillery.......................................................63 Alaska Fracture & Orthopedic Clinic.............66 Alaska Logistics......................................................117 Alaska Oil & Gas Congress...............................124 Alaska Procurement Technical Assistance Center.......................17 Alaska Rubber........................................................105 Alaska USA Federal Credit Union....................21 Alaska USA Insurance Brokers.......................109 American Marine / Penco.................................135

BP ..................................................................................15 Bristol Bay Native Corp........................................68 Business Insurance Associates Inc..............108 C & R Pipe and Steel Inc.......................................41 Calista Corp. / Futaris............................................33 Carlile Transportation Systems........................64 CH2M.............................................................................42 Construction Machinery Industrial...................2 Covenant House Alaska.......................................58 Craig Taylor Equipment....................................139 Cruz Construction Inc..........................................80 Dan Tech Services...................................................25 Davis Constructors & Engineers Inc..............84 Doyon Limited.............................................................3

Judy Patrick Photography...............................138 Kaladi Brothers Coffee..........................................51 Landye Bennett Blumstein LLP............................9 Lynden Inc...............................................................121 Microcom....................................................................29 Motive Power Marine.........................................120 N C Machinery..........................................................83 New Horizons Telecom Inc................................26 Nortech Environmental & Engineering........91 Northern Air Cargo................................128, 129 Northwest Strategies..............................................11 Odd Man Rush Brewing.......................................61 Olgoonik Corp..........................................................74 Oxford Assaying & Refining Inc....................133

Anchorage Distillery LLC.....................................63 Anchorage Sand & Gravel...................................91 ARCADIS......................................................................97 Arctic Office Products..........................................16 ASRC Energy..............................................................75 AT&T...............................................................................13 Bambino’s Baby Foods..........................................45 Bettisworth North...................................................87

EDC Inc.....................................................................101 Eklutna Inc..................................................................99 Fairbanks Memorial Hospital..........................112 First National Bank Alaska.....................................5 GCI..................................................................116, 140 Global Diving & Salvage Inc...........................118 JP Construction/ Alaska Concrete Polishing..........................92

Pacific Pile & Marine.................125, 126, 127 Paragon Interior Construction......................101 Parker Smith & Feek...............................................35 PenAir...........................................................................39 Peppercini’s Deli & Catering..............................54 Personnel Plus.......................................................132 Quality Asphalt Paving......................................105 Quintillion Networks.............................................25

Ravn Alaska................................................................19 Ritchie Brothers Auctioneers............................93 Span Alaska Transportation Inc.......................34 Special Olympics of Alaska................................59 Stellar Designs Inc...............................................132 Superior Group.....................................................103 The Plans Room....................................................103 Think Office..................................................................9 Truckwell of Alaska.............................................118 Tundra Tours.............................................................41 UA Local 367 Plumbers & Steamfitters....................................................86 UAA College of Business and Public Policy.............................................27 UIC Oil & Gas Services.......................................119 United Way of Alaska...........................................111 Visit Anchorage........................................................ 31 Voice of the Arctic Inupiat...................................71 Washington Crane & Hoist..................................10 Waste Management...............................................96 Watterson Construction......................................85 Yukon Equipment Inc............................................95

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138

Alaska Business Monthly | July 2016www.akbizmag.com


Alaska Business Monthly July 2016  

ABOUT THE COVER: The cover photo was taken in Denali National Park and Preserve near the Eielson Visitor Center in 2015 during one of Jeff S...

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