Legislature(2013 - 2014)BARNES 124
03/19/2013 11:15 AM House ECON. DEV., TRADE & TOURISM
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Importance of Creating an Economic Development Plan | |
| South Denali National Park and Preserve Visitor Center | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, TRADE AND
TOURISM
March 19, 2013
11:23 a.m.
MEMBERS PRESENT
Representative Shelley Hughes, Chair
Representative Lynn Gattis
Representative Bob Herron
Representative Pete Higgins
Representative Harriet Drummond
Representative Geran Tarr
MEMBERS ABSENT
Representative Craig Johnson
Representative Kurt Olson
Representative Lance Pruitt
COMMITTEE CALENDAR
PRESENTATION(S): IMPORTANCE OF CREATING AN ECONOMIC DEVELOPMENT
PLAN
- HEARD
SOUTH DENALI NATIONAL PARK AND PRESERVE VISITOR CENTER
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DON DYER, Director
Economic Development
Matanuska-Susitna (Mat-Su) Borough
Palmer, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Matanuska-Susitna Borough Economic Development
Overview," dated 3/19/13.
CHRIS GATES, Economic Development Consultant
Palmer, Alaska
POSITION STATEMENT: Participated in the presentation by the
Matanuska-Susitna Borough.
MYRON P. NANENG SR., President/Chairman
Sea Lion Corporation
Hooper Bay, Alaska
POSITION STATEMENT: Spoke during the presentation by the
Division of Parks and Outdoor Recreation, Department of Natural
Resources.
BEN ELLIS, Director
Division of Parks and Outdoor Recreation
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation entitled
"South Denali Visitor Center," and dated 3/19/13.
DAVID KASSER, Vice President
Tourism Development & Sales
Visit Anchorage
Anchorage, Alaska
POSITION STATEMENT: Spoke in support of the South Denali
Visitor Center project during the presentation by the Division
of Parks and Outdoor Recreation, Department of Natural
Resources.
JOHN BITTNER, Vice President
Anchorage Economic Development Corporation (AEDC)
Anchorage, Alaska
POSITION STATEMENT: Spoke in support of the South Denali
Visitor Center project during the presentation by the Division
of Parks and Outdoor Recreation, Department of Natural
Resources.
ACTION NARRATIVE
11:23:46 AM
CHAIR SHELLEY HUGHES called the House Special Committee on
Economic Development, Trade and Tourism meeting to order at
11:23 a.m. Representatives Drummond, Tarr, Higgins, and Hughes
were present at the call to order. Representatives Gattis and
Herron arrived as the meeting was in progress. Chair Hughes
introduced the topic of the meeting, saying that Alaska does not
have an economic plan that carries through changes in
administration. She said a 50-year economic plan is appropriate
for a young state with much to do.
^PRESENTATION(S): IMPORTANCE OF CREATING AN ECONOMIC
DEVELOPMENT PLAN
PRESENTATION(S): IMPORTANCE OF CREATING AN ECONOMIC DEVELOPMENT
PLAN
11:26:28 AM
CHAIR HUGHES announced that the first order of business would be
a discussion on the importance of an economic plan and how it
helps growth and planning. Chair Hughes provided brief
background information on the presenters.
11:27:11 AM
DON DYER, Director, Economic Development, Matanuska-Susitna
(Mat-Su) Borough, informed the committee the Mat-Su Borough's
economic development plan was a grass-roots effort created in
2010 by many focus groups comprised of community members. The
plan is a reflection of what is desired by the community. Mr.
Dyer began by presenting some economic challenges to the state.
Approximately 72 percent of the state's revenue comes from oil
and 18 percent comes from federal spending. This is not a
sustainable scenario for many reasons thus the Mat-Su Borough is
preparing for a post-oil economy [slides 1-3]. During the
recession from 2007 to 2012, most states lost jobs except for
the resource development states of Louisiana, Texas, Alaska, and
North Dakota. The Mat-Su Borough also had job increases, even
though there is little resource development [slide 4]. The Mat-
Su Borough has a strong history of employment, and government
jobs represent 40 percent of the growth in the past decade
[slides 5-7]. Mr. Dyer pointed out that the average income in
the Mat-Su Borough is $37,000 per year compared to the Anchorage
average income of $50,000 per year [slide 8]. In addition, 31
percent of the Mat-Su Borough residents live in the borough and
work in Anchorage [slide 9]. Regarding foreclosures associated
with the recession, the Mat-Su area was little affected [slides
10 and 11]. In 2012, the Mat-Su Borough was the fastest growing
area in the state and has the fastest business growth rate,
evidenced by the issuance of 1,165 new business licenses.
Economic interest in the Mat-Su Borough continues because of
statewide oil tax revenue. In fact, oil supplies $9.7 billion,
which is $38,704 for each household in the state [slides 12 and
13]. Cutting oil revenue by 25 percent and replacing that
revenue by another tax borne by residents would mean that each
household would be taxed by over $9,600, threatening the
Permanent Fund Dividend (PFD) program and harming the economy
[slide 14].
11:35:16 AM
MR. DYER advised that to guard against the loss of oil tax
revenue, the Mat-Su Borough developed an economic development
strategic plan with five goals and twenty-six strategies [slide
16]. Workgroups under each strategy meet regularly to discuss
topics ranging from tourism, aviation, business outreach, and
agriculture to fisheries. He described the strategic plan as a
living document that can be amended and adapted as needed. The
workgroups are comprised of approximately one hundred
professionals who conduct business independently [slide 17].
11:38:04 AM
CHAIR HUGHES asked how long it took to develop the plan and the
parameters for the workgroups.
MR. DYER explained the development of the plan took about a
year. The workgroups are not official committees or boards, but
are meant to add an economic development facet to existing
boards; for example, the aviation board sets policies and the
workgroup is forming an economic model for the airports and
airspace. The workgroups generate agendas and submit minutes
for circulation to all members and to the director.
CHAIR HUGHES inquired as to whether the workgroups are permanent
or have a specific goal to achieve.
11:41:02 AM
MR. DYER said the workgroup process began in November, and the
first step was to assess the community's interest. Eventually,
the progress of each workgroup's action items will be published
on a web site. In further response to Representative Hughes, he
agreed some of the workgroups will be perpetual, such as
outreach to veterans and businesses. Membership in the
workgroups includes those from private industry and government,
especially for transportation and planning issues. Returning to
the presentation, he said the Mat-Su Borough's tax model ranks
as the friendliest in Alaska, noting that large to mid-size
companies are very tax-sensitive [slide 18]. He observed that
Port MacKenzie is an all-Alaska project because in addition to
shipping out mining material, the rail connection from the port
to the mainline in Houston will enable heavy equipment and goods
needed for mining and infrastructure development to be brought
in. After the infrastructure in the Interior is built, the
resources can flow out [slide 19]. In response to
Representative Drummond, he confirmed that the slide 19 image is
representative of how the port is configured at this time.
11:47:26 AM
REPRESENTATIVE DRUMMOND urged for the committee to tour the
port, the prison, and Knik Arm Bridge and Toll Authority
(KABATA) offices.
MR. DYER said the Port of Anchorage and Port MacKenzie create a
strategic redundancy to the port system and can solve many
problems together. In response to Chair Hughes, he pointed out
that the Port of Anchorage is the main access point for consumer
goods into Alaska; however, Port MacKenzie can accommodate
larger ships and has 14 square miles of staging area for
materials prior to loading on railcars. Seward is the
northernmost ice-free port and is a coal loading facility.
11:51:18 AM
MR. DYER directed attention to strategies the state can use to
prepare for a post-oil economy and opined it is necessary to
invert the thinking that the consumer capacity of Alaska is the
target of a business model. Because of Alaska's small
population, the customer base sought should be global, and
global exports should be the economy of scale. This type of
model has been very successful for Dubai and Singapore [slides
20-22].
11:53:16 AM
CHRIS GATES, Economic Development Consultant, provided a brief
history of his professional experience and opined a huge demise
in economic activity in Alaska - due to the decline of oil
revenue - is only eight years away. He encouraged the committee
to be very aggressive in economic development because by the
time the Trans-Alaska Pipeline System (TAPS) is not sustainable,
the state must have something else that comes close to replacing
an economy based 70 percent on oil. Contrary to what has been
said, economic activity in the future sufficient to keep a
majority of the population in Alaska can be created, and the
Mat-Su Borough is the most aggressive jurisdiction in Alaska
working to create a post-oil economy. Mr. Gates said there is a
bias in the constitution for developing natural resources but
the protection of resources, land, and fish and game assets have
primacy in public policy; in fact, nowhere is there a team
similar to that in Mat-Su to advocate aggressively for economic
activity and create jobs statewide. For example, he suggested
that because of the agricultural land available in Alaska there
could be joint ventures with countries on the east coast of Asia
to provide food security in the face of their population
explosions. In addition, doing what is necessary to open the
Arctic National Wildlife Reserve (ANWR) would supply enough oil
to fill TAPS in the future. He recalled the Dow-Shell petro-
chemical consortium proposed for Fire Island in 1983 that could
have produced 3,000 jobs and filled southbound cargo ships with
value-added products. Mr. Gates said the Alaska Regional
Development Organization (ARDOR), Department of Commerce,
Community & Economic Development programs are a very important
small investment for large regions of the state, and produce
good ideas. Lastly, he extolled the benefits of the Susitna-
Watana Hydro project that will bring electricity to the Mat-Su
Borough and expressed his support for building the dam with
capacity for expansion. Mr. Gates concluded that a non-oil
economy is possible with creative thinking and a warlike
attitude.
12:01:39 PM
MR. DYER called attention to Alaska's market advantages: 30
percent closer to Asia than Los Angeles [slide 23]; 4,000 ships
per year transit the chain of Aleutian Islands; 2,000 cargo
aircraft transit Ted Stevens Anchorage International Airport per
month, many departing empty; ractopamine-free pork; no swine
disease; and quality vegetables [slide 24-27]. Mr. Dyer urged
for an Alaska-wide integrated focus instead of a regional or
city focus and to think of Alaska as a country. It is important
that a statewide development plan comes from grass-roots efforts
by the private sector - in a manner similar to the Mat-Su
economic plan - in that it is relevant to residents and is not a
political tool. Further, the plan must be measured and reported
by mechanisms than can "roll up and drill down effectively"
[slides 28 and 29].
12:07:15 PM
REPRESENTATIVE TARR asked for the source of a poster provided in
the committee packet entitled, "Value Added Food Production
Cluster."
MR. DYER said the poster was generated from a technology system
that creates a food hub from marketplace demand and producer
inventory information. This type of a study is important for
agriculture and food security.
REPRESENTATIVE DRUMMOND urged for cooperation between Anchorage
and the Mat-Su Borough in many areas such as transportation.
MR. DYER advised the root of the transportation problem is how
federal transportation funds are disbursed. He mentioned the
Mat-Su Borough is in strong support of the South Denali Visitor
Center project.
^SOUTH DENALI NATIONAL PARK AND PRESERVE VISITOR CENTER
SOUTH DENALI NATIONAL PARK AND PRESERVE VISITOR CENTER
12:12:17 PM
CHAIR HUGHES announced that the next order of business would be
a presentation on the South Denali National Park and Preserve
Visitor Center.
12:12:26 PM
MYRON P. NANENG SR., President/Chairman, Sea Lion Corporation,
informed the committee Sea Lion Corporation is the village
corporation in Hooper Bay. The corporation purchased a former
Native allotment, the location of which is identified as
"Private Property" on the Department of Natural Resources (DNR)
South Denali Visitor Center, Denali State Park, Project Overview
Plan map provided in the committee packet. Sea Lion Corporation
is working with the state to donate 100 acres of that land for
the South Denali Visitor Center. He pointed out the road
through the previously identified property is the most esthetic
access to the proposed visitor center. Through its subsidiary,
United Companies Inc. (UCI), Sea Lion Corporation has agreed to
transfer $1 million worth of land to the visitor center project.
At this time, $13 million has been received from the state and
work has begun on the road. Although Hooper Bay is located in
Western Alaska, it is a party with the state and the Mat-Su
Borough for this economic development project occurring in the
Interior. Mr. Naneng added that the village corporation is also
working to reestablish the Lower Yukon Alaska Regional
Development Organization (ARDOR), Department of Commerce,
Community & Economic Development program in Wade Hampton as an
opportunity for future economic development. He urged the
committee to preserve funding for the ARDOR program in order to
foster projects that benefit the village of Hooper Bay.
12:15:53 PM
BEN ELLIS, Director, Division of Parks and Outdoor Recreation,
Department of Natural Resources (DNR), informed the committee
the South Denali Visitor Center Complex is located adjacent to
Denali State Park and the George Parks (Parks) Highway, about
one mile from the Denali View South Scenic Overlook. The
planned build-out includes a visitor center, campground, trails,
and the electrification of the Parks Highway from Talkeetna.
The total cost is $46 million - of which $6 million is for
electrification - and funds received to date are $13.4 million
from the state and a $1 million corporate contribution from
Princess Cruise Lines (Princess) [slide 2]. Mr. Ellis said
phase 1 of the project has been discussed for 40 years and will
finally break ground in the spring of 2013 to build a 2.3 mile-
long gravel access road to 35 Recreational Vehicle (RV)
campsites, a day use trail head parking lot, an Americans With
Disabilities Act (ADA) gravel trail, and a maintenance shop, and
to fund the preliminary design of the access road to the visitor
center and electrical extension. The total cost of phase 1 is
$13.4 million [slide 3]. A schematic map of phase 1 indicated
the property donated by Sea Lion Corporation adds 104 acres to
the park. The land retained by the corporation is the site of a
proposed lodge, thus phase 1 is the beginning of economic
development and growth for the area. The road will provide
access to the proposed lodge and is the preferred egress to the
campground, which should open in the spring or summer of 2014
[slide 4].
12:21:39 PM
MR. ELLIS returned attention to the electrical upgrade, noting
that three-phase electricity will be installed from Milepost
(MP) 121 to MP 135 along the Parks Highway, in support of
businesses, fire and emergency facilities, schools, and the
community of Trapper Creek. This electrical upgrade will
benefit the local area and tourism business opportunities [slide
2]. He explained that phase 2 does not have a starting date or
funding and includes the access road, the visitor center, walk-
in camping, more ADA accessible and other trails, and trails
eventually culminating in hut-to-hut hiking. The estimated cost
of phase 2 is $32.6 million [slide 6]. A schematic map of phase
2 was provided [slide 7].
12:24:24 PM
MR. ELLIS, in response to Chair Hughes, said phase 1 is
projected to open to the public in the summer of 2014. The
timeline for phase 2 depends on funding. He recalled that the
first funds received for the project were $8.9 million in
general funds (GF) in fiscal year 2009 (FY 09). The money was
"stored" until $3 million was provided in FY 12 and $1.5 million
in FY 13. He expressed his hope that the completion of phase 1
will bring in a small amount of revenue and will raise interest
in future funding for phase 2.
CHAIR HUGHES asked whether there are funds in the governor's
budget for phase 2.
MR. ELLIS said no, and added that phase 1 funding will first be
put to use.
REPRESENTATIVE TARR asked for the basis of the $1 million
corporate contribution by Princess and whether there are
opportunities for other private investment.
12:27:36 PM
MR. ELLIS explained the corporate donation from Princess is
earmarked to be added to the $5 million of state funds for the
electrical extension. The electrical extension will benefit the
Princess hotel nearby. He assured the committee his division is
always looking for collaborative opportunities and is working
with the national park service and the Matanuska-Susitna
Borough. Mr. Ellis stressed some of the positive economic
impacts of the project as follows: additional visits by
residents and non-residents; possible increase in tourism
revenue to $44.8 million per year; jobs during the construction
phase and to service ongoing visitor services; and the
development of adjacent private land supporting tourism growth
[slide 8].
12:32:17 PM
DAVID KASSER, Vice President, Tourism Development & Sales, Visit
Anchorage, said the South Denali Visitor Center project brings
[Mount McKinley] to the people because a visit to Denali is one
day closer for tourists who are on tight schedules. This time
savings will allow the expansion of visitor experiences in the
Kenai Peninsula, Homer, and Valdez so that more tourism dollars
are spent in Southcentral. In addition, in the winter months
there will be convention opportunities and better opportunities
to see the park and the mountain.
12:36:48 PM
JOHN BITTNER, Vice President, Anchorage Economic Development
Corporation (AEDC), stated AEDC supports the proposed South
Denali Visitor Center project because it fits in with AEDC's
mission to grow and diversify the Anchorage economy. The
tourism and service sector is projected to be a major growth
sector for Anchorage and Southcentral.
REPRESENTATIVE TARR asked whether the South Denali Visitor
Center is part of AEDC's Live.Work.Play effort.
MR. BITTNER said the expansion fits with the mission and intent
of Live.Work.Play.
12:40:51 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Economic Development, Trade and Tourism
meeting was adjourned at 12:40 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Economic Development Plan MSB Don Dyer 19Mar13.pdf |
HEDT 3/19/2013 11:15:00 AM |
|
| ValueAdded Food Production Don Dyer 19Mar13.pdf |
HEDT 3/19/2013 11:15:00 AM |
|
| South_Denali_Impacts_Final_23Feb2008.pdf |
HEDT 3/19/2013 11:15:00 AM |
|
| South Denali History.pdf |
HEDT 3/19/2013 11:15:00 AM |
|
| South Denali Visitor Center DNR 3 19 2013 pdf.pdf |
HEDT 3/19/2013 11:15:00 AM |