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20 12 Moving right along By land, sea and air, the Mat-Su Borough is in the fast lane

C Section Friday, July 27, 2012


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FRIDAY, JULY 27, 2012

FRONTIERSMAN.COM

Borough betting on the port BY ANDREW WELLNER Frontiersman.com

ROBERT DeBERRY/Frontiersman

The cargo ship JP Azure is loaded with a shipment of coal at the Port MacKenzie dock.

All of that assumes completion of a railroad spur under construction to link the port to the Alaska Railroad’s mainline. In November, voters will consider a $68.5 million general obligation bond passed by the Legislature as House Bill 286 that would fund the Port MacKenzie Rail Extension, Bogard Road extension east, KnikGoose Bay Road reconstruction and Fairview Loop Road reconstruction. But if the line is funded and built, with those savings, Usibelli would likely increase production, bringing an estimated $78 million in increased revenue to the Alaska Railroad, Dyer said. The borough and state — which has plowed tens of millions of dollars into the rail project already — say that existing miners aren’t

the only ones who will see savings and want to capitalize on them. New mines would open. New commodities would cross the port’s docks. “Between Fairbanks and the Mat-Su Borough it equates into about 3,500 jobs that it would create in that area,� Dyer said. Those numbers — the savings to shippers, the revenue to the railroad and the potential jobs — are far from a complete picture. They show the port’s potential, but don’t quantify it. “Being able to quantify all of that is something that is top of (my) mind for me as an economic developer,� Dyer said. “That is something that we are currently working on and that’s a high-priority project for me.� And that’s after the rail

spur is built. None of those jobs are in constructing the line. He also emphasized that those are good, family wage jobs as miners, loggers and associated mechanics and other tradesmen. But does Mat-Su want to start competing with the Port of Anchorage? Does it honestly think it can win that competition? Dyer said the borough won’t even try. Mat-Su is a commodities port, shipping coal and limestone and other resources in bulk or importing heavy freight rather than containerized cargo like in Anchorage. It’s conveyor belts filling up the bellies of huge boats rather than cranes lifting boxes off their decks. Really, the port that most resembles what the borough’s up to at Point MacKenzie is the Port of Seward. “We are a competitor with them; however, the competitive advantages to both ports don’t really overlap,� Dyer said. “I think that the freight consumer has compelling choices for both ports.� Another way to say that is there is lots of room in the marketplace. “Plenty of room,� Dyer said. Is the port worth the ecological effects of extracting

resources and building the infrastructure needed to ship them? “I don’t think you can ever stop them because human beings are always going to consume them, and as long as we are a source of them someone is going to try to sell that source,� he said. “We can appropriately influence the way that they are developed so that way we can improve our quality of life as well as maintain the revenue to support the quality of life for the Mat-Su Borough residents.� The proposed bridge across the Knik Arm from Anchorage to Point MacKenzie brings potential for additional opportunity. Such a bridge would be aimed at a few things. It would attempt to get big trucks off of the Parks Highway in populated areas like Wasilla by giving trucking companies a shorter route from Anchorage to the state’s Interior. But a lot of people also like the idea that it would open up the Point MacKenzie area to residential development. If a bridge means Point MacKenzie is all of a sudden just a couple miles from downtown Anchorage, people crowded out of the Anchorage real estate market, where

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POINT MACKENZIE — On the way to the MatSu Borough’s Port MacKenzie, there is not a lot to see in the way of other infrastructure. There are a few fields, maybe a construction crew or two. Mostly, what you see is trees — lots and lots of trees on raw, undeveloped land. Once you get past that raw land, the port may not seem like much, either. There’s a gravel barge dock, a big trestle dock for ships to tie up at, a mostly empty ferry terminal building, and that’s about it. Another way of looking at the trees and raw land surrounding the port is as an opportunity, and it’s an opportunity the borough — and the state, really — has for years been attempting to capitalize upon. The idea is that a port in deep water this far north in Alaska would unlock vast resources in the state’s Interior. But should the port develop first or the resources? Should the state and borough build a port hoping that resources will come or should they wait until the resources are already out of the ground and seeking a place to meet tidewater? It’s a multi-million dollar chicken-or-egg dilemma. But it’s also not that simple. In some cases, resources are already coming out of the ground. “We did the calculations and the savings for Usibelli (Coal Mine) on their Healy coal shipments — going out of Port Mac Kenzie will save them $1.4 million per shipload,� said Don Dyer, head of economic development for the borough.

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raw land is scare to nonexistent, will come here. Here we arrive at another argument against the port: Does it really fit with residential development? “The port district is only 14 square miles,� Dyer said. “There is a whole lot of other land out there that can turn into residential development.� And, he said, no one who’s looking at the port wants it to turn into some kind of big, industrial area no one would want to live near. We’re not talking Port of Long Beach in California, here. “I can say that internally the discussion is active about making sure that we preserve green space, large areas of green space even inside the port district so that it’s not going to become just this industrial blight zone,� Dyer said. Finally, there’s an argument that goes like this: If all these resources are coming from the Interior and heading out to the global marketplace, what’s in it for Mat-Su as the conduit? This is where people start throwing out words like “lynchpin� and “crown jewel� to describe port development. For one thing, tariffs at the port and rent from companies operating there on borough land put money in borough coffers. Which, in turn, could mean, lower taxes. “The direct beneficiaries of that revenue from Port MacKenzie will be the property owners that normally pay the property tax,� Dyer said. “That will continue to keep our (property tax) rate as low as it is, which is the lowest in the state, and be able to enhance and create further services.� Lower taxes also mean more businesses would want to locate out here, even ones that don’t really relate to the port. That was the impetus behind a move by the borough in May to lower taxes paid on inventoried materials. Previously, businesses with less than $250,000 in inventory didn’t pay the tax. The assembly raised that bar to $1 million. He said port operations fall into a segment of the economic picture that he said is the bedrock of the economy. It’s not dependent on the national or global economy like tourism. And it’s not dependent on local economic forces like retail sales. Every economy has this one thing that it’s built on. “For the state, it’s oil. But we can see that oil prices are dropping again. We have tax issues, we have volume issues, and oil is becoming a larger and larger question mark for our future,� Dyer said. “Here in the Mat-Su Borough, we’re looking to diversify and create a stable economy that is not oildependent.� And the port, he said, is key to that. Contact reporter Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.

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The Alaska Department of Commerce, Community and Economic Development is tasked with a wide variety of duties to support the department’s mission to promote a healthy economy and strong communities. DCCED strives to create an environment that can help Alaska’s economy grow and create opportunity for residents. It frequently works in partnership with other agencies and organizations to develop Alaska’s economic foundations: affordable energy, transportation networks, workforce development, modern communication systems and strong local governments. Alaska Railroad Corp. is a corporate agency of DCCED. In operation since 1923, Alaska Railroad is a full-service freight and passenger railroad linking ports and communities to Anchorage, Fairbanks and other communities throughout Southcentral and Interior Alaska. A pair of significant railroad projects will open new economic development opportunities for the businesses and residents of the Mat-Su Valley — the Port MacKenzie Rail Extension and the Northern Rail Extension.

Port MacKenzie rail extension The Mat-Su Borough and Alaska Railroad jointly proposed construction and operation of a new rail line to connect the borough’s Port MacKenzie to the existing rail system. The port lies about 30 miles southwest of Wasilla and about five miles due north of Anchorage, across Cook Inlet. The selected route involves 32 miles of new rail line extending from Port MacKenzie to the Alaska Railroad’s mainline just south of Houston. Port MacKenzie has a deep draft dock that requires no dredging and can serve the world’s largest ships (Panamax and Cape Class vessels). Port MacKenzie’s 8,940 upland acres and 1,300 tideland acres provide ample room to accommodate bulk resource storage, transport and processing facilities, as well as rail and terminal facilities for efficient train loading and unloading. When the Environmental Impact Statement, design and construction phases are complete, the new rail line will operate as part of the Alaska Railroad system.

BIG PICTURE

By Susan Bell

Economic benefits The rail line will support Port MacKenzie’s potential as a bulk resources export and import facilities. The rail line will support natural resource development. Increased rail freight activity would benefit Railbelt communities through increased employment, contributions to state and community tax base and overall economic health. With room for layout and storage, Port MacKenzie is an ideal site to supply materials for pipeline and other construction projects. The project is scheduled for construction from 2012 through 2015, with operations starting in 2016. The project legal team submitted an opposition brief on June 27 in response to a lawsuit brought by the Alaska Survival/Cook Inlet Keeper/Sierra Club. Work on permits and right-of-way acquisition for various segments of the rail line continues, and site work is under way on the first segment nearest the port. For more information, visit portmacrail.com.

Northern rail extension The Alaska Railroad Corp. is working toward a new rail line between North Pole and Delta Junction. The project would involve approximately 80 miles of new rail line connecting the existing Eielson Branch rail line at the Chena River Overflow Structure to a point near Delta Junction. The proposed rail line would provide freight and potentially passenger rail services serving commercial interests and communities in or near the project corridor. The new rail line would be operated as part of the Alaska Railroad system, available to the general public, commercial and military shippers, including agricultural and resource development businesses. The track could also support public transit operations between Fairbanks, North Pole, Salcha and Delta Junction. See BELL, Page C4

Sky’s the limit for aviation BY GREG JOHNSON Frontiersman.com

MAT-SU — “Growth,� “transportation� and “education� are a few of the usual buzz words bantered about when local officials talk about priorities for the Valley’s future. More recently, “economic development� has joined the usual suspects in that lineup. While the Mat-Su Borough’s various municipalities have different philosophies on how that economic development should happen, one common denominator is aviation. In the fastest-growing area of the state that has the largest per capita population of airplanes and pilots, developing the Valley’s airports and aviation industry will be a critical part of attracting new, high-paying industries, said Don Dyer, the borough’s economic development director. “Air is definitely a key component to economic development here, and it’s amazing the impact on the economy it has,� he said. “It’s there in places the average Alaskan doesn’t think about, like Talkeetna. That airport up there, according to the Aviation Advisory Board, contributes about $4.5 million to the economy every year. Without that airport, it would be difficult for them to have as much of an economy as they do.� Wasilla has the Valley’s largest municipal airport, a facility that’s undergoing upgrades to accommodate larger aircraft and a wider variety of air services, said mayor Verne Rupright. The goal, he said, is to make the airport a viable candidate for companies as a maintenance hub or aviation support industries, like companies that make parts. A zero navigation system is also on the way, Rupright said. That system will allow pilots to facilitate instrument approaches into the airport, which increases

ROBERT DeBERRY/Frontiersman

A U.S. Air Force C-17 kicks up a cloud of dust as it takes off from the Palmer Municipal Airport. Federal Aviation Administration regulations require a minimum runway of 8,000 feet to accommodate larger cargo jets. Wasilla’s runway is 4,000 feet and can expand to 6,000.

ABOUT THE COVER A C-17 flies over the Palmer Airport in this photograph by Robert DeBerry.

and Workforce Development. “When one grows, it really reaches out and touches a lot of industries. Air transportation grows, you’re going to have more people employed there and bypass Anchorage to some degree.� That air opens up potential for other industries, like manufacturing, is one benefit, she said. The Valley is in a unique position now because the potential of aviation to impact the area’s economy is up to the imagination, she said. “It’s one of those anything-is-possible deals,� Schanks said. “Maybe there might be a niche for the Valley to be a secondary hub for some of the smaller off-road communities. That’s a way where they can grow without really competing with Anchorage. For instance, such a decent percentage of people who live out in the Valley work on the Slope, and if people don’t have to drive to Anchorage and potentially pay to leave their cars for

the airport’s capability of receiving aircraft in poor weather. “Once we get that accomplished, we have a lot of carriers that want to get out of Anchorage and come out here,� he said. The real potential has yet to be realized, Rupright said. “The economic driver, and I don’t know how many more years it’s going to be, but we know Costco had wanted to come here once before, and those big corporations are wanting to come here because (the population) is exploding,� he said. “Instead of buying bulk in Anchorage and trucking it up here from Ted Stevens, they could buy it in bulk for the same price and ship it up to Wasilla.� Having a vision for the potential of local airports like the municipal fields in Wasilla and Palmer “can be a big revenue generator and brings in a lot of dollars,� said Alyssa Schanks, an economist with the state Department of Labor

two weeks at a time, that’s a huge savings. ‌ And that could be more money spent locally.â€? As much as the Mat-Su’s existing airports are looking for ways to attract new industries and business to the Valley, the real longterm growth potential for aviation is still just a faraway thought, Rupright said. “Years ago, the plan was always to locate Ted Stevens Airport at Point MacKenzie, as they looked out 50 years into the future,â€? he said. “If you get the (Knik Arm) Bridge through and all that stuff, you’ll see an airfield there, there’s no doubt in my mind.â€? Efforts are under way now to bring the longplanned Knik Arm Bridge to reality, a span that would connect Anchorage to Point MacKenzie. Along with development of the Mat-Su Borough’s port and a new Alaska Railroad spur that’s under construction, air is “the logical next stepâ€? for the area, Rupright said. Contact reporter Greg Johnson at greg.johnson@ frontiersman.com or 3522269.

Ferry may be a losing bet BY ANDREW WELLNER Frontiersman.com

MAT-SU — The M/V Susitna car-carrying, icebreaking, state-of-the-art ferry remains docked in Ketchikan, long past its delivery date, while the Mat-Su Borough decides its fate. As wagers on economic development go, the ferry may prove costly. The Mat-Su Borough agreed to take the ferry from the U.S. Navy, which was building the ship as a scaled-down prototype of a beach-landing warship. The borough touted it as a link between Point MacKenzie and Anchorage, a

way to shuttle commuters into town or bring over construction materials, shuttle inmates between Anchorage and the Goose Creek Correctional Center, demonstrate the need for a Knik Arm bridge, or serve as an emergency rescue vessel or ‌ the list was seemingly endless. But the project stalled and is all but dead because the borough simply couldn’t find the money or a location to build a dock for it on the Anchorage side. The ship is capable of landing and offloading vehicles on a beach, but to safely use it as a civilian ferry requires a pair of

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Economic opportunities in the Mat-Su

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FRIDAY, JULY 27, 2012

FRONTIERSMAN.COM

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MATSU BOROUGH ROAD CONSTRUCTION PROJECTS There are more than $200 million in road construction projects under way in the borough. State plans over the next five years include more than $400 million in additional projects — and that number is likely to increase. PROJECT: Glenn Highway Reconstruction Mile 53-56 TIMEFRAME: More than three years COST: $45 million DESCRIPTION: Reconstruct the highway, straighten out the curve north of Palmer, and replace the Moose Creek Bridge. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Glenn Highway Rehabilitation Mile 66.5-80 TIMEFRAME: More than three years COST: $49 million Rehabilitate the highway from King River past the Chickaloon River with major realignment near Fish Lakes Road and the Chickaloon River. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Glenn Highway Reconstruction, Mile 34-42 TIMEFRAME: Three years COST: $74 million DESCRIPTION: Build the highway out to four lanes from its intersection with Parks Highway through to the northern edge of Palmer. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Glenn Highway Rehabilitation, Mile 80-92 TIMEFRAME: More than three years

BELL Continued from Page C3

Economic benefits Improved commercial freight service for communities and businesses, including the agricultural, mining and petrochemical sectors. The rail extension also would provide safe and reliable passenger service for area residents and visitors, and enhanced military access

COST: $24 million DESCRIPTION: Rehabilitate and realign the highway from Long Lake to Cascade, including a bridge over Purington Creek and improvements to the Long Lake wayside. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Glenn Highway reconstruction, Mile 49 TIMEFRAME: More than three

years COST: $7.2 million DESCRIPTION: Evaluate erosion of the highway north of Palmer at Mile 49, move the highway away from the Matanuska River. SOURCE: State of Alaska Statewide Transportation Improvement Plan PROJECT: Bogard Road Extension TIMEFRAME: Two years COST: $32 million DESCRIPTION: Extend Bogard Road to the Glenn Highway. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Seward Meridian Parkway Upgrades TIMEFRAME: Two years COST: $29 million DESCRIPTION: Upgrade the road to four lanes and push it through to Seldon Road from its terminus at Bogard Road. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Wasilla Couplet TIMEFRAME: More than three years COST: $27 million DESCRIPTION: Mitigate traffic congestion by turning Main Street/Knik-Goose Bay Road

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to training areas west of the Tanana River. ARRC initiated conceptual development of the project in 2004. The Draft EIS was released in December 2008. In late 2010, Kiewit was selected as construction manager and general contractor, with Phase One construction starting in July 2011, and an expected completion date of July 2014. The project will move forward with final design and construction in four

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phases: • Tanana River crossing at Salcha (Joint Tanana Range Access). • Rail construction from Moose Creek near North Pole to the Salcha Crossing. • Rail construction from the Salcha crossing to the Donnelly Military Training Area. • Donnelly to Delta Junction. The project team is working on permitting, and materials for con-

and Yenlo Street/Talkeetna Street into a pair of one-way streets. SOURCE: State of Alaska Statewide Transportation Improvement Plan PROJECT: Lucus Road Upgrades TIMEFRAME: More than three years COST: $24 million DESCRIPTION: Upgrade Lucus Road between Parks Highway and Spruce Avenue into a two-lane facility with shoulders, turn lanes, bike paths, landscaping and drainage. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Parks Highway Reconstruction TIMEFRAME: More than three years COST: $147 million DESCRIPTION: Widen the Parks Highway to four lanes between Wasilla and Big Lake Road. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Knik-Goose Bay Road Widening TIMEFRAME: Three years COST: $83.3 million DESCRIPTION: Widen the road four lanes with a center divider between Centaur Avenue on the south side of Wasilla to Settlers Bay Drive. SOURCE: State of Alaska Statewide Transportation Improvement Plan

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PROJECT: Fairview Loop Rehabilitation TIMEFRAME: Three to four years COST: $26.5 million DESCRIPTION: Revamp all 11 miles of the road, widening lanes and adding shoulders and a pedestrian pathway.

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struction of the bridge have arrived at the fabrication plant, and site work continues at the river. Planning for a local community project open house in August is under way. For more information, visit northernrailextension.com. Susan Bell is commissioner of the Alaska Department of Commerce, Community and Economic Development.

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SOURCE: Project website, brooks-alaska. com/fairviewloop PROJECT: Palmer-Wasilla Highway Eastern Terminus TIMEFRAME: More than two years COST: Unclear DESCRIPTION: Improve Evergreen Avenue and Dogwood Avenue in Palmer to ease traffic flow. SOURCE: Project website, pwhet.com

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PROJECT: South Mack Drive Extension TIMEFRAME: Unclear COST: $11 million DESCRIPTION: Extend Mack Drive, the road that runs by the Menard Sports Complex, to connect with Knik-Goose Bay Road.

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PROJECT: Resurfacing Hatcher Pass Road TIMEFRAME: Three years COST: $8.2 million DESCRIPTION: Resurface the gravel part of the road from Mile 18 to Mile 20. SOURCE: State of Alaska Statewide Transportation Improvement Plan PROJECT: Bridge Replacement TIMEFRAME: Two years COST: $6.5 million DESCRIPTION: Replace bridges built from decommissioned railcars in the borough with acceptable bridges. SOURCE: State of Alaska Statewide Transportation Improvement Plan

READ MORE See the front page of today’s Frontiersman for more on current and planned road construction projects in the Mat-Su Borough.

FERRY Continued from Page C3

docks on either side of the Knik Arm. Borough officials have said they are looking at a number of solutions to the problem. They’re still trying to get money to build those landings, but say they have no illusions about the likelihood of attaining state or federal money for that. They’re also looking for a way to sell or lease the vessel. And while the ship was free — the Navy usually dismantles its prototypes — and the federal government paid to outfit it as a ferry and build a terminal building at Point MacKenzie, in the end the project could cost borough taxpayers millions. The federal government told the borough that the

money for the terminal was contingent upon the creation of ferry service. If no ferry goes into service, the borough will have to pay back $20 million. And if the ferry isn’t used to provide commuter service for vehicles, the borough is on the hook to repay that money, too. Part of the negotiations when the borough is looking at potential users of the vessel includes working with the Federal Transit Administration to determine what the various plans will mean for the borough’s financial liability. Meanwhile, the ferry sits moored in Ketchikan while the borough pays thousands each month in storage fees. Contact reporter Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.

2012 Profiles Part 1  

A look at upcoming transportation projects planned in the Mat-Su Borough.