4th Quarter 2007

Welcome!
To our new investors:
Bob Poe
Princess Tours
Scott Balice Strategies, LLC
Renewing investors:
AK Supply, Inc.
Alaska Interstate Construction
Alaska InvestNet
Alaska National Insurance Co.
Alaska Railroad Corporation
Alaska Rubber and Supply, Inc.
Alaska Telecom, Inc.
Anchorage Council of Bldg
& Construction Trades Unions
Carr-Gottstein Properties
Chugach Electric Association, Inc.
City Electric, Inc.
Coffman Engineers, Inc.
Cornerstone Construction Co., Inc.
CRW Engineering Group, LLC
Dorsey & Whitney LLP
F.R. Bell & Associates, Inc.
Flowers International LLC
Fred Meyer Stores, Inc.
The Arts are Big Business
in Anchorage
Arts & Economic Prosperity III, a national survey from promoters of the arts,
shows that nonprofit arts and culture are a thriving industry in Anchorage – one
that generates $45.16 million in annual economic activity.
According to the survey, this spending–$27.91 million by nonprofit arts and
culture organizations and an additional $17.25 million in event-related spending
by their audiences—supports 1,168 full-time equivalent jobs, generates $24.24
million in household income to local residents, and delivers $3.84 million in local
and state government revenue. Not included in the study was spending by individual artists and the for-profit arts and culture sector – such as for-profit arts groups,
artists, photographers, painters, sculptors or the multi-million dollar expansion of
the Anchorage Museum of History and Art at the Rasmuson Center.
While the study focused solely on the economic impact of the nonprofit arts, the
social and community benefits cannot be overlooked. Organizations such as the
Alaska Center for the Performing Arts,
Anchorage Museum of
History and Art, and all of
the various performance
groups, galleries and
individual artists also
enhance the quality
of life and help
attract new residents,
business and a skilled
workforce to Anchorage.
AEDC STAFF
Bill Popp
President & CEO
Erin Ealum
Business & Economic
Development Director
Heather Gould
Communications
Director
Hallie Bissett
Logistics &
International Trade
Director
Kari Mahar
Investor Relations &
Events Coordinator
Rebecca Shortman
Executive Assistant
HDR Alaska, Inc.
Holmes Weddle & Barcott PC
Immediate-Care, Inc.
International Union of Operating
Engineers, Local 302
Jaguar Development Group
JL Properties, Inc.
Ken Brady Construction Co. Inc.
Merrill Lynch
Millenium Alaskan Hotel
Anchorage
Movers, Inc.
N C Machinery Co.
Norcoast Mechanical
Northrim Bank
Nye Frontier Toyota Lexus
of Alaska
Porcaro Communications, Inc.
page 1
Alaska Considers
Incrreased Oil Taxes
page 2
President’s Letter
page 3
MOUs Offer Chinese
Business Boost
page 4
Anchorage Museum On
Target for 2010 Opening
page 5
AEDC is a private nonprofit
corporation (IRS code 501(c)(6)),
operating since 1987. It exists to
encourage growth and diversity in
the Anchorage economy, promote
a favorable business climate and
improve the standard of living of
Anchorage residents. Funding
sources for the corporation are
municipal and state grants, contracts, and private contributions.
For permission to reproduce any
part of this newsletter, please call
(907) 258-3700.
Banking Innovations Help
Foil Fraud Attempts
page 6
UAA Opens New
Science Center
Alaska Considers Increased Oil Taxes
New rate will be the highest in North America
Platinum Investor Spotlight
The key to the future of oil development in Alaska is investment. Investment will enable
Alaska’s oilfields to keep producing revenue for the state, and create jobs for Alaskans for
decades to come. Without large sustained investment, oil production will go into a steep
decline, a fact on which the industry, the regulators and economists all agree.
On October 18, the Alaska Legislature will convene in Juneau to consider changing and,
quite likely, raising oil taxes. This will be an important decision that will impact the future
for every Alaskan.
The governor has proposed a new oil tax that would replace the PPT (petroleum profits tax),
approved by the Alaska Legislature in August 2006. Under the proposed tax, the state
estimated the total government take would reach 68 percent, based on a $60 oil price.
Alaska already has the highest government take in North America. The proposed changes
would further increase Alaska’s tax rate and make the state less attractive to investment just
as more investment is needed.
“I think we have to respect the governor’s right to ask the Legislature to re-address the existing
tax structure (PPT),” said BP President Doug Suttles. “What is important now is that we
have a good and thoughtful debate. This is going to be about Alaska’s future. It’s important
that we encourage investment in this state and make sure the Alaska tax structure will do that.”
As context, it is worth bearing in mind that the new PPT tax amounted to a significant tax
increase just last year. The Department of Revenue estimates that during the first nine months
of the petroleum profits tax, the state collected $805 million more than it
would have under the previous tax system (April 1 – December 31, 2006).
This article sponsored by BP
Convention Center
Progress
Potelcom Supply, Inc.
Prudential Jack White
Vista Real Estate
WHAT’S INSIDE
BuyAlaska Unveils
New Website
Perkins Coie
Providence Alaska
Medical Center
The Newsletter of
Anchorage Economic
Development
Corporation
page 7
Pegasus Aircraft Maintenance,
LLC
Premera Blue Cross Blue
Shield of Alaska
AEDCconnections
Economic Snapshot
Greatland Laser, LLC
Anchorage is one of 156
communities and regions
that participated in Arts &
Economic Prosperity III, which
documents the nonprofit arts
and culture industry in 116 cities
and countries, 35 multi-county regions and
five states. Anchorage organizations filled out
surveys in the summer and fall of 2006.
4th Quarter, 2007
900 West Fifth Avenue, Suite 300
Anchorage, AK 99501
(907) 258-3700
www.aedcweb.com
page 8
The Arts Are Big Business
RIM Architects
Shell Oil
Sheraton Anchorage Hotel
Ted Stevens Anchorage
International Airport
Tesoro Alaska
Petroleum Company
The Wilson Agency, LLC
8
URS Corporation
WebWeavers
Technology Group
1
AEDC
ECONOMIC SNAPSHOT
Letter from the President
Alaska’s economy continues to grow, with nearly 2000 new jobs created in Anchorage alone
during the first half of this year. Solid employment numbers in Anchorage and Alaska for
2007 show the largest workforce, largest number of people employed and one of the lowest
unemployment rates in Anchorage and Alaskan history. And a number of projects in our
downtown core and beyond, some of which you will read about in this issue, will spark even
more economic development in our vibrant city.
But growing pains are coming, and some would say they are already here.
Local business leaders report increasing difficulties filling open jobs with talented and skilled
workers. With several large oil & gas and mining projects in various stages of development
across Alaska, as well as other development and growth in our broader economy, we are
facing a new dynamic that runs counter to our past experiences. Growing worker shortages
could have implications for our entire Alaskan economy in the next decade.
Alaska is also competing with the rest of America, and even internationally, to attract and
retain these highly sought after workers. Earlier this summer, at the Pacific NorthWest
Economic Region (PNWER) conference in Anchorage, provincial government officials from
Alberta noted that they are projecting a 100,000+ worker shortfall in their province over
the next 10 years and similar projections were shared by British Columbia and the states of
Washington, Idaho and others.
2nd Quarter Commercial
Construction Permit Valuations
$144,930,205
$109,993,367
2005
4.63
$110,398,474
2006
2007
• Commercial construction valuations totaled
$110.4 million for the 2nd quarter of 2007, a
decrease of 24 percent from the 2nd quarter
of 2006 and an increase of 0.4 percent from
the 2nd quarter of 2005.
2nd Quarter Residential
Construction Permit Valuations
$92,687,275
$103,411,340
$53,754,285
2005
2006
2007
• Residential construction valuations totaled
$53.8 million for the 2nd quarter of 2007, a
decrease of 48 percent from the 2nd quarter
of 2006 and a drop of 42 percent below the
same period in 2005.
2nd Quarter Total Employment
147,335
150,470
151,335
But the question should be “how,” not “if,” will we fill these jobs.
In the following pages, you’ll read about the University of Alaska Anchorage’s growth,
but rest assured that UAA is not alone in building our future. With the help of many in
our business community, the State of Alaska and local communities over the last 20 years,
Anchorage has created a healthy economy to be proud of, and those same people are making
sure that our workforce keeps pace through a number of innovative programs. Engaging
and training Alaska’s youth and adult workers is a priority in our city. As the efforts continue, coordination and cooperation at its highest level should be a critical strategy to ensuring
the investment in the future pays off.
AEDC is doing just that. There are tremendous opportunities in Anchorage for workers
now and in the future. And, as we continue to market our city as a great place for business,
the doors should stay wide open, with new people and new ideas coming in to make it even
better.
As far as problems go, this is not a bad one to have. Meeting the challenges of a growing
economy is the cost of doing business. I’m confident that we’re all up for a good challenge,
and positive we’re up for good business.
2004
2005
2006
• Total employment in Anchorage increased
by 865 jobs between the 2nd quarter of
2007, an increase of 0.6 percent. Total 2nd
quarter 2007 employment was 2.7 percent
above the same period in 2005. An average
of 151,335 workers were employed during
the 2nd quarter of 2007, based on Alaska
Department of Labor and Workforce Development data.
2nd Quarter TSAIA Transit Cargo
(millions of pounds)
1,112.4
2005
1,075.1
2006
1,114.4
2007
• In the 2nd quarter of 2007, 1.11 billion
pounds of cargo moved through Ted
Stevens Anchorage International Airport,
a 3.7 percent increase from the 2nd
quarter of 2006 and an 0.2 percent
increase from the 2nd quarter of 2005.
2nd Quarter TSAIA
Deplaning Passengers
664,196
627,793
2005
Bill Popp
President and CEO,
AEDC
2
646,066
2006
2007
• Ted Stevens Anchorage International
Airport traffic included 664,196 deplaning passengers during the 2nd quarter of
2007, an increase of 2.8 percent from the
2nd quarter of 2006 and an increase of 5.8
percent from the 2nd quarter of 2005.
Economic data compiled by
Board of Directors
EX-OFFICIO MEMBERS
Legislators
$11 Billion Target of
Buy Alaska’s New Website
Harry Crawford
Representative,
Alaska State Legislature
Fred Dyson
Senator,
Alaska State Legislature
The Buy Alaska program will revolutionize the process of promoting local businesses, products and
services when it launches buyalaska.com, a completely new, state-of-the art website, on Alaska Day,
October 18, 2007.
Hollis French
Senator,
Alaska State Legislature
Alaskans spend approximately $11 billion Outside each year (UAA ISER 2007), with an everincreasing trend toward on-line shopping by consumers, businesses and government purchasers. The
new website, buyalaska.com, will enable any and all Alaska businesses to take advantage of this trend
by making it easy for shoppers to find Alaska businesses on the web. According to UAA ISER, if
Alaskans shift just 10% of Outside purchases back to Alaska, $1.1 billion revenue will be generated
and over 4,000 Alaska jobs created.
Craig Johnson
Representative,
Alaska State Legislature
Alaska businesses can set up their free, lifetime, full-page, color listings
by going to buyalaska.com and following the easy instructions.
Buy Alaska’s goal is to have 10,000 Alaskan businesses listed on the website by the October 18
launch day.
Anchorage’s Dena’ina Civic &
Convention Center Progressing Rapidly
With just a little under a year to go, the $107
million, 215,000-square foot Dena’ina Civic &
Convention Center in Anchorage remains on
schedule for a September 1, 2008 opening. The
Center, when combined with the William A.
Egan Civic & Convention Center, will increase
the city’s civic and convention capacity by 300
percent.
The expanded facility, designed by Rim Architects and LMN, is no drab convention center.
Instead, the designers have created a space that
works in harmony with the Anchorage scenery
and unique year-round sun angles.
Taking cues from Alaska’s four distinct seasons,
architects designed the quad-level facility to
reflect the natural colors of the local area. One
level embraces fall landscapes and the changing
tints of the high country. Another level takes
visitors into the summer landscape by employing vibrant hues. Reflective materials and cooler
tones surround visitors as they move into the
winter landscape.
Two major pieces of art will provide decoration
to the development.
The first, by Ralph Helmick and Stuart Schecter
of Newton, Mass., is a towering 65-foot sculpture that will draw the visitor’s eye upward into a
spiraling menagerie of Alaska’s wildlife. Situated
in the main lobby, glowing resin birds, indigenous mammals and graceful sea creatures,
seemingly float upward. The sculpture, “Con-
stellation,” will cascade through the 100-foothigh lobby creating a visual anchor through
the multi-level facility. The lowest level depicts
Alaska’s abundant sea-life through a delicate,
circular inlay of Southcentral’s sea creatures in
the tile floor under the main body of the work.
The second major work, awarded funding
as part of the Dena’ina Civic & Convention
Center collection, is by Athabascan Artist James
Grant from Fairbanks, Alaska. Grant’s submission consists of a 30-foot long, multi-media
mural named “A Dena’ina Day Around Cook
Inlet.” Laser-cut and painted images combine
with aluminum animals and stained glass depictions of traditional Athabascan activities, which
convey to the viewer the richness and beauty
of the Dena’ina culture. It will adorn the wall
in the pre-function area outside of the Center’s
main ballroom.
For additional information on meeting space in
Anchorage, Alaska, explore www.anchorage.net/
meetings, or contact the Anchorage Convention
& Visitors Bureau Convention Meetings Sales
& Service Department at 1-888-257-2381.
Municipality
Mayor Mark Begich
Municipality of Anchorage
Dan Coffey
Assembly Member,
Municipality of Anchorage
Appointed by the Board
Chris Anderson
Deputy Director,
Credit & Business Development
AIDEA
Mike Brady
Vice President,
Ken Brady Construction Co. Inc.
Larry Cash
President,
RIM Architects
Julie Saupe
President & CEO,
Anchorage Convention
& Visitors Bureau
Carol Comeau
Superintendent,
Anchorage School District
Jim Gorski
Member,
Hughes, Bauman, Pfiffner,
Gorski & Seedorf, LLC
Mary K. Hughes
State Director,
Office of U.S. Senator
Lisa Murkowski
Ed Lamb
CEO & President,
Alaska Regional Hospital
Fran Ulmer
Chancellor,
University of Alaska, Anchorage
Douglas M. North
President,
Alaska Pacific University
Tennys Owens
President,
Artique, Ltd.
Bill Evans
Chair, Anchorage
Chamber of Commerce
Mort Plumb
Airport Director,
Ted Stevens Anchorage
International Airport
Kathy Porterfield
Managing Partner,
7
AEDC
2007 Board of Directors
Voting Members
AEDC PLATINUM INVESTORS:
UAA Responds to Anchorage’s Needs
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Sophie Minich, Chair
Chief Operating Officer,
CIRI
UAA educates more than 60 percent of the students in the state’s university system. In Fall 2007, UAA will serve
nearly 20,000 students with nearly 158 different certificate and degree programs from
nursing and engineering to aviation and
mining. In Spring 2007, 75.6% of graduates had earned degrees in high-demand
job areas, including education, engineer%JTUSJDU1SFTJEFOU
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like
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Jeffrey Davis
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students
a
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career and technical education programs
Joseph Everhart
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destructive
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computer
technology, computer
ship with community
leaders.
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information and office systems, aviation
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technology, process technology, occupaManager of Supply Chain Management,
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central to our ability to fully serve our city
David Hamilton
chain managmenet and project manage
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and
state
workforce
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next decade.
Craig Haymes
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born from the
merger of a community
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Stephanie Holthaus
is always open
to new partnerships.
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four-year university. This
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“There is a lot going on at UAA.”
history provides
UAA with a broad sense
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the Integrated Science Facility at UniversiBrian Nerland, Vice Chair
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MOUs Offer Beijing Business
Boost for Anchorage
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Officials from the Anchorage Economic Development Corporation (AEDC) hosted a delegation from Beijing, China, on Tuesday, August
21st, to sign two important Memoranda of
Understanding that will lay the groundwork for
strengthening economic ties and trade relationships between the two cities.
The second MOU is an agreement between
the Port of Anchorage and the Beijing Liqiao
Bonded Logistics United Development Co.,
Ltd. The agreement partners the two free-tradezone license-holders as mutually benefiting economic partners that will continue to investigate
investment and trade opportunities together.
AEDC signed a similar agreement with Beijing
“Alaska’s trade with China has grown exponen$*3*BOE#SPXNBO%FWFMPQNFOU$P Liqiao
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in January.
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and transfer products across the Pacific,” said
mote tourism opportunities between China
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Anchorage Museum Construction
On Target For 2010 Completion
Long time museum director Pat Wolf celebrated her past with a sneak preview into the
future. On Sunday September 23, the museum held a public retirement party for Wolf
and pulled back the curtain on the museum’s new wing, showing the near-completion of
the structural frame that will support the growing interests of the local art community.
The 70,000 square-foot addition to the Anchorage Museum continues to progress and
is on schedule to be completed by 2010. The expansion, a collaboration between David
Chipperfield Architects of London and local Anchorage firm Kumin and Associates, will
allow the museum to display more of its current art and history collections and will include
the first Smithsonian Institution facility outside Washington, D.C. The new structure will
include temporary exhibit space, library and archives, and a new shop
and café. The existing museum will be renovated to become the new
home of The Imaginarium’s hands-on science galleries. A beautifully
landscaped 2-acre public plaza adjacent to the new structure will
create an active, vibrant place for both outdoor exhibits and yearround recreation.
The expansion of Anchorage’s Museum of History and Art will be a
showpiece of energy efficiency using some of the latest strategies to
reduce electric and heating costs, improve air quality and rely on natural
materials and lighting. That’s the result of the Assembly’s recent approval
of Mayor Mark Begich’s proposal to make the museum expansion
Anchorage’s first municipal LEED (Leadership in Energy and
Environmental Design) building. The project will help spur new
economic development by requiring local content and recycled materials.
The expansion is possible thanks, in part, to more than 500 individuals,
foundations, businesses and government agencies whose financial support has enabled
the museum to reach its initial $16 million capital campaign goal. The museum is now
launching a Close the Gap fundraising campaign to raise an additional $5 million
in community support by year’s end for renovations to the existing museum which
will house The Imaginarium as part of the expansion. Along with $1.8 million in
matching grants from two private foundations, museum founder Mary Louise Rasmuson
has issued a $1.5 million dollar matching grant for donations or pledge commitments
made before Dec. 31.
The expansion project is set for completion in 2010. For more information on
the Anchorage Museum expansion or on the fund-raising campaign, visit
www.anchoragemuseum.org/expansion or call (907) 343-6175.
Banking Innovations Help
Foil Fraud Attempts
Businesses large and small tend to be big targets of financial fraudsters, who often use
technology to perpetrate their crimes. Yet it’s also technology that’s helping business
owners and financial services professionals fight fraud, especially through early detection.
According to a 2004 study by the American Bankers Association (ABA), bank prevention systems caught 88 percent of check fraud attempts. Even with improving
prevention systems, check fraud costs U.S. businesses billions of dollars each year and
since 1997, the number of fraud attempts against bank accounts has doubled every
two years.
To stem the increasing tide of fictitious checks and unauthorized withdrawals, the financial services industry has developed powerful weapons such as “positive pay”, electronic
account reconciliation, payment authorization services and check security features that
make replication and forgery more difficult.
Positive Pay – With positive pay, a business provides its financial services company
with a list of checks it has issued. When a check is presented for payment, the financial
institution compares the check with the positive pay list. If there’s no match, the banker
can alert a business customer and request verification. Positive pay is one of the most
powerful weapons in the war against check forgery and fraud.
Electronic Account Reconciliation – Another useful financial service is account reconciliation reporting. This service electronically matches your check issue information
against checks actually paid on your account, up to 50 times a day. Electronic account
reconciliation provides peace of mind with automated and customizable reports
containing detailed information about check register and stop payment receipts,
outstanding checks, reversed checks, cancelled checks, unpaid checks, deposit activity,
and more.
Check 21 – Expedited check clearing through the implementation of the Check 21
Law is another way technology is advancing check fraud detection. Check 21 took
effect in October 2004, and deemed that valid digital check images are the legal
equivalents of original checks. Businesses now have access to check images as soon
as items enter the collection stream. This means that financial services companies
and business owners can react faster to fraud attempts and take immediate steps to
prevent losses.
Mobile Banking –Mobile banking technology—which allows business managers to
access account information from handheld mobile devices like a BlackBerry or PDA
(personal digital assistant)—has augmented fraud monitoring capabilities. Many
major U.S. financial services companies now offer mobile service for businesses, where
customers can view key treasury reports through a secure browser session. In the future,
wire approvals, image positive pay exceptions, and administrative tools such as password
resets will all be part to these technologies and help customer protection
Proactive prevention and vigilance are a business owner’s best weapons against fraud.
With exacting banking innovations and vigilant bankers, you’ll have an even stronger
arsenal to battle financial fraud.
Joe Everhart is senior vice president and Alaska Commercial and Business Banking
manager for Wells Fargo. You He can be reached at 265-2981 or
joseph.c.everhart@wellsfargo.com.
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