Business Intelligence

Business Intelligence

Anchorage feels sticker shock with new $2 billion port repair cost
Anchorage officials are feeling sticker shock over the estimated doubling of repair costs at the Port of Alaska, from about $1 billion to $2 billion. The new figure is an extrapolation of a revised, more detailed, estimate of a phase one of the project, which increased from $124 million to $223 million. Phase one is a
new petroleum and cement terminal. Higher phase one costs, when analyzed, were then applied to the entire project. One factor behind the increase is higher dredge costs, which city officials had been told originally could be funded by the U.S. Army Corps of Engineers. That’s now turned out to be not the case. Another factor is climate change. Engineers now say higher dock platforms are needed because of anticipated sea level rise over the next 75 years.

The port is in poor shape from corrosion and other problems, and there a possibility of structural failure, particularly in the event of an earthquake a little stronger than that of Nov. 30. The bulk of consumer goods for Southcentral, Interior and northern Alaska come through the port and an emergency alternative, in case of failure, is a combination of using Seward and Whittier ports and barges along with more trucking and air cargo. It would be expensive. There is no source of funds for the higher repair costs and city officials may consider revenue bonds, which would be paid for by port users, and ultimately consumers.

Anchorage sets April vote on alcohol tax hike
Anchorage’s assembly voted 10-1 to put a 5 percent alcohol tax increase on the municipal ballot in April, which would raise $13 million in new revenues. Mayor Ethan Berkowitz is pushing the tax to help the municipality deal with homelessness, much of it related to alcohol, and to fund treatment programs. The Alaska Cabaret, Hotel, Restaurant and Retailers Association is opposing the increase, saying it unfairly burdens businesses and responsible drinkers. The tax could raise an $8 six-pack of beer to $8.40.

Engineers: Tall buildings withstood quake better
Engineers analyzing data from the Nov. 30 earthquake determined that shorter buildings generally experienced more severe shaking than taller buildings partly due to the higher frequency of seismic waves from the quake epicenter about 7 miles from Anchorage. Taller buildings had more structural “give,” and experienced shaking that was less intense, in general. Date was obtained from 22 sensors in different buildings around the city. The type of soil beneath the structure was also a factor. The information will be used to refine building standards.

Governor’s request for federal disaster assistance likely to total $100 million
Gov. Mike Dunleavy asked the federal government for $58.7 million in disaster-relief funds related to damage from the Nov. 30 earthquake, but he said additional requests that will come as more information is available could bring the total to $100 million. The damage is mostly to homes, much of it in the Eagle River-Chugiak area of north Anchorage, but there was also damage to larger buildings including schools. The Matanuska-Susitna Borough considered itself lucky to have a $25 million earthquake insurance policy. Additional assistance will come from the federal government. Four schools in the Mat-Su were heavily damaged with one that will need replacing. Three other schools suffered lighter damage.

Some in government-averse Chugiak now want residential building approvals
The Nov. 30 earthquake is prompting some Chugiak residents to call for Anchorage’s stringent building standards to be applied in the community. Currently the area does not fall under the municipality’s Building Safety Area requirements. The Chugiak Community Council passed a resolution asking for reviews of residential home plans by an engineer but it must go to the full Chugiak-Eagle River Community Advisory Board before going to Anchorage’s assembly. Homes in the Chugiak Eagle River area suffered major damage from the 7.0 earthquake and many blame it on lack of municipal building standards. Fewer homes in Anchorage, where standards do apply, suffered heavy damage.

DoD plans $70 million upgrade at Shemya radar facility
The Department of Defense said it will spend $70 million to upgrade the Cobra Dane missile defense radar installation on Shemya Island in the Aleutians, operated by the U.S. Air Force. The facility has long been in use to detect missile launches and, in recent years, objects in space, but many of its components are obsolete and need modernization. Cobra Dane’s radar is coordinated with Clear Air Force station’s long range missile defense systems. Cobra Dane has a 95-foot-wide array that faces Russia.

Economists: Robust Northwest economy creates population drain from Alaska
Alaska’s population dropped 1,600 between July 2017 and July 2018, according to the latest population estimates by state demographers. The survey shows 7,577 people left the state and 5,969 moved to Alaska during the period, for a net loss of 1,600. The trend is not unusual when there is a vibrant regional economy in the Pacific Northwest and a slack economy in Alaska, which is experiencing its third year of mild recession. Anchorage showed a loss of 2,368, which was partly offset by a gain of 1,355 in the Matanuska-Susitna Borough, the state report said. The Fairbanks North Star Borough lost 734, but Fairbanks will see a big gain in population when new military personnel and families begin arriving later this year.

Nome cracks down on underreporting for local personal property tax
The City of Nome will conduct audits of a sample of personal and business property tax returns filed with the city. Until now the city has relied on an honor system to record personal property subject to local tax but now a contract auditor will be hired to analyze a sample of the returns. Personal property can include boats, snow machines and other vehicles but not autos. Household furniture and personal effects are exempt. Business property subject to tax includes operating equipment and supplies, computers and software but not inventory. The city’s action stem from suggestions by state assessors. Personal and business property not properly valued could affect the state’s full-value determination of local tax base, which affects state funds for local schools. The city will select a sample of tax return for audit in early February.

Southeast expects surge in new tourists with bigger cruise ships; port improvements needed
Southeast Alaska could see a surge in new cruise tourists in the next decade as more firms enter the Alaska market with bigger ships that carry more passengers, Ketchikan officials were told in a briefing Jan. 10. The projection is for cruise passengers arriving in Ketchikan to reach 1.5 million in 10 years, about a 50 percent increase. Alaska is one of the most profitable cruise destinations for the industry, analysts at Bermello, Ajami & Partners, a cruise tourism consulting firm, told the city of Ketchikan. The firm has also developed new concepts for passenger dock facilities to aid in unloading and loading passengers from the larger vessels. Ketchikan is already considering a plan for a $75 million reconfiguration of its Berths 1 and 2 with floating docks. Skagway and other Southeast communities also have plans to accommodate the bigger ships.

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