Business

 

A Southeast Alaska Native corporation and a conservation group are combining forces to try to spur sustainable regional development. They’re funding a $500,000 business-plan contest aimed at, but not limited to, the area’s smaller communities.

It’s no secret Southeast Alaska has had its share of economic problems. They’ve hit villages and small cities especially hard.

“Our focus has to be on providing opportunities for families and residents to remain in these rural communities,” said Russell Dick, president and CEO of Haa Aaní, LLC, a subsidiary of the Juneau-based Sealaska regional Native corporation.

Haa Aaní has a nonprofit community development fund. It’s partnering with The Nature Conservancy on a competition, called Path to Prosperity.

“This is really a program about creating entrepreneurship, creating business, creating economic development in a way that utilizes our natural resources within the communities to sustain lifestyles,” Dick said.

The contest will collect proposals from Southeast residents, businesses and tribal entities.

A dozen finalists will be brought to Juneau for a weekend boot camp to learn about business development and plan-writing.

Norm Cohen is Southeast program director for The Nature Conservancy. The international organization supports environmentally friendly, small-scale development projects.

“Our theory of change is that there are other uses of forest products and activities that can take place in the forest that can be a strong economic opportunity that will last for a long period of time without jeopardizing use for future generations,” Cohen said.

Two contest winners in each of three rounds will receive up to $40,000 in consulting and technical services.

Dick of Haa Aaní saids that could include help with trademarks and patents, hiring and financing.

“Hopefully by the en of the second year, after continued development of their business plan, our goal is to put them in contact, or partner them, with organizations that can provide venture capital funding, financing and other types of loans,” he said.

The Nature Conservancy is providing a quarter-million-dollar grant for the competition. Dick said Haa Aaní will match that with staff time and other support.

Sealaska has a lot of critics.

One is Juneau shareholder Brad Fluetsch. He’s a private financial manager and moderator of the 4,400-member Facebook site Sealaska Shareholders.

“It’s a business competition because the management of Haa Aaní is completely devoid of ideas, comprehension or ability to manage a business,” he said.

Fluetsch said he’s proposed village commercial ventures such as harvesting berries, growing peonies for the wedding market, and collecting wild mushrooms.

“There’s 11 varieties of commercial mushrooms that could be easily harvested in Southeast. (I’ve) written up an entire business plan for Sealaska. This is how you make money on our land creating jobs in our communities,” Fluetsch said.

Dick said he’s aware of the proposals, and they could be submitted to the competition or considered separately.

Parent company Sealaska is in the resource-development business and logging has provided a large portion of its revenue.

Dick said Haa Aaní is looking for smaller enterprises. That could include shellfish farms, berry-picking or wood-pellet production.

“Saying we’re going to come in and develop a mine somewhere in one of our communities may create an issue for us,” he said.

Competition organizers will offer an informational webinar Aug. 12th. The deadline for the first round of proposals is Sept. 16th.

Sealaska has about 21,000 shareholders with tribal roots in Southeast. Fewer than half live in the region, with many in Anchorage or the Pacific Northwest.

Alaska Electric Light and power will test the Salmon Creek emergency sirens Thursday morning at 9 o’clock.

The high-pitched siren will last about three minutes and be heard in the 30-acre flood plain downhill from the dam.  The evacuation area extends from Bartlett Regional Hospital to Jack’s Plumbing on Glacier Highway along Twin Lakes.

AELP has two sirens and is required to test them periodically to ensure adequate sound levels.  Spokeswoman Debbie Driscoll says the company needs to know if businesses and residents in the area do not hear the noise.

“The biggest concern at this stage obviously when we’re dealing with the evacuation area is that everyone within the area can hear the sirens,” she says.

In an emergency, the company also would called every business and residence in the area, and notify local radio stations, “but there really is  a small window if the dam ever failed to get people out of that area quickly,” she says, “so the sirens are the thing we rely on most.”

The concrete dam has never failed.

The Federal Energy Regulatory Commission requires the power company test its emergency and communications systems on a regular basis. Every five years, an actual evacuation drill is required.

The dam itself is inspected monthly by the company.

“FERC comes out and inspects the dam once a year and makes sure that our emergency evacuation plan is complete and acceptable to them. And then every five years we have to have an independent source come and do a complete inspection outside of FERC and ourselves. So it’s a very well-monitored system,” she says.

Thursday’s  test will be heard only in the immediate area of the dam.  It is an audible test, not a drill, so evacuation is not necessary.

Home construction in Juneau is up.

The city and borough reports an increase in number of building permits for single family homes as well as multiple-family units during the first six months of this year.

CBJ Community Development Director Hal Hart said the city has issued 43 construction permits since January for a total of 89 residences.

“The best news is that we’re seeing housing on both sides of that. We have single family home investments occurring and we’re hoping we’ll see more.  And we’re also seeing manufactured home investment occurring as well,” Hart told the Juneau Assembly Monday night.

The current figures include 28 single-family homes, some with attached apartments, as well as an increase in the number of duplexes, and units with three and four individual homes.

“We’ve had a manufactured home park that’s pulled off 12 old units and put 12 brand new units in, so there’s 12 more brand new manufactured units,” he said. In addition, two separate permits have been approved for a total of 25 multiple-family units.

Six residences have been added to Juneau’s housing inventory through what Hart calls conversions to existing single family homes.

Hart said he expects a couple of proposed large apartment or condominium projects to qualify for building permits later this year.

A top Assembly goal for the year is to increase affordable housing in Juneau, but Hart said that housing sector is not growing.

The State of Alaska has re-bid three contracts for janitorial services in Juneau that are less than two weeks old.

REACH, Inc. previously had the contracts. The nonprofit offers on-the-job training to people with disabilities and has provided custodial services in Southeast Alaska for almost 30 years.

Last month, REACH lost some of its state contracts in a competitive bid process to JJG Cleaning Services, a Juneau company that now says it doesn’t have the staff to handle the workload.

It was first time in 20 years the State of Alaska had solicited bids for its Juneau janitorial services. Department of Administration Spokesman Andy Mills doesn’t know why it had been so long. But he says the Parnell administration decided to put ten contracts out to bid in April.

“The state is always looking for things that we can do to be more efficient or provide services to the public at a lower cost,” Mills says.

The winners were announced last month. The largest contract was for the 180,000 square foot State Office Building, which had been cleaned by REACH Custodial Services since 1992.

REACH started the janitorial program in the mid-1980s with just a handful of small offices in Juneau. By 2012, the nonprofit’s clients were cleaning more than a million square feet of office space in the Capital City and other Southeast communities.

Executive Director Millie Ryan says the program has two main goals.

“One is to train people to acquire skills so they can get jobs in the community,” Ryan says. “The other is for folks who may not be able to get jobs in the community, we employ them and give them an opportunity to work and earn a paycheck.”

Ryan says REACH clients – many of whom have developmental disabilities – also benefit from daily interaction with other janitors and employees in the offices they serve.

“All the things that we all look for,” she says. “The chance to contribute, be a part of a group of people, a team.”

REACH bid about $312,000 per year for the State Office Building contract – slightly less than what it was paid to perform the service the previous year. JJG Cleaning Services bid about $193,000, undercutting REACH by 38 percent. Nearly all of JJG’s bids came in significantly lower than other companies that bid on the janitorial contracts.

As an organization that hires and trains people with disabilities, REACH gets preferential treatment when it comes to state contracts. But it wasn’t enough to overcome JJG’s much lower bid.

“We put together the best bid that we could, but got outbid,” Ryan says.

JJG is a 10-year-old company owned by Lyndon and Gina Del Rosario. It has about 15 full and part time employees and nearly 20 janitorial contracts in Juneau and Ketchikan, but none the size of the State Office Building.

Lyndon Del Rosario declined to comment on tape for this story, but said Tuesday the company would ask the state to end the SOB contract. He referred further questions to his wife, who did not return several messages.

The state’s Mills says the company did, in fact, ask out of the contracts for the State Office Building, Dimond Courthouse, and the 3rd Floor of the state Capitol on Wednesday, less than two weeks after the agreements were signed.

“As I understand it, JJG is exercising their right to terminate three of the contracts because of workload and staff levels,” says Mills.

He says JJG will honor its contracts in five other state facilities.

The state would not allow KTOO to interview employees involved in the proposal review process. But Mills says its “speculative” to suggest they missed something in JJG’s proposals that would indicate the company didn’t have the resources to perform the work.

“Certainly we’re disappointed that JJG has requested the termination of three of the contracts that they were awarded,” says Mills. “And certainly we are planning to put in the next competitive bid language that will help address the vendors adequacy for the contracts that they apply for.”

Mills says JJG is currently providing custodial services in the SOB and other buildings where it has terminated contracts, and will continue to do so until the state can award new bids. He says re-bidding the contracts won’t result in any significant extra costs or loss of staff time for the state.

REACH’s Ryan says she was surprised JJG ended its contract so quickly, but thought it might happen at some point.

“Those are big buildings, and you need to have enough people on hand to be able to do the work,” Ryan says.

The state on Thursday issued new requests for proposals for janitorial services at the State Office Building, Dimond Courthouse and 3rd floor of the Capitol building. Ryan says REACH plans to submit bids for all three.

Fishing slowed down for the eighty-five boats that participated in yesterday’s purse seine fishery in the Amalga Harbor special harvest area. This was the second opening for returning DIPAC chum salmon.

While the effort was similar to last week’s, commercial fisheries area biologist Dave Harris says the catching wasn’t as robust.

“Kind of all depends on the timing of the chums coming back and it appears that the chum have been early this year. The peak was actually in last week’s opening, so we did catch that peak period.”

During last week’s July 4th opening, 84 boats harvested 645,000 chum salmon.

DIPAC executive director Eric Prestegard says the fish are selling for 55-60 cents a pound.

“Last week, they caught almost 5 million pounds so that’s almost $3 million in six hours.”

This is only the second year this fishery has been open and Prestagard hopes DIPAC can continue to do it every year.

A state antitrust lawyer says a proposed merger may pit the commercial shipping equivalents of David against Goliath in Southeast Alaska.

The plan, announced in April, involves three shipping companies: Seattle-based Alaska Marine Lines, Seattle-based Northland Services, and Sitka-based Samson Tug and Barge. AML’s parent company, Lynden Inc., wants to buy AML competitor Northland Services.

If that was the end of the plan, Lynden would have a monopoly on shipping in Southeast.

It’s Assistant Attorney General Ed Sniffen’s job to review the merger plan, negotiate fixes to the anticompetitive parts, and if necessary, fight it out in court.

“Competing with someone like Lynden is a tough thing to do,” he said Thursday, speaking to the Juneau Chamber of Commerce. “I mean, they’ve been around, they’re big, they know what they’re doing. You get someone like, you know, Samson coming in, trying to swing at Goliath a little bit. And you want to make sure they’ve got a big hammer so when they hit him, he feels it.”

Though Sitka-based, Samson right now doesn’t operate elsewhere in Southeast. Samson Vice President Cory Baggen says the company only has about 10 employees in the panhandle, all of them in Sitka. However, Samson announced plans to expand its service in Southeast the same day Lynden announced its intent to buy Northland.

AML has been touting that expansion as the antidote to its Southeast monopoly.

“I think that the competition is going to be as stiff … as it is today with Northland, and normally competition tends to keep the prices down,” said AML President Kevin Anderson. “You know, we’re not going into this thinking we’re going to lose any customers. And if we have to battle for them to keep them, so be it.”

Many details of the vetting and deal making are under wraps – at least until the Department of Law files something in court – but the parties have essentially said that Northland won’t be wholly absorbed by Lynden. Instead, Northland may be carved up between Lynden and Samson in service of the smaller company’s Southeast expansion.

For example, Baggen said Samson is eyeing Northland’s current location on Channel Drive as its future port in Juneau. And if everything goes forward, she says her company will probably pick up 40 or 50 of Northland’s employees in Southeast.

That last “if” brings it back to the Department of Law. Baggen says Samson won’t start investing and expanding until the merger’s greenlit. But the merger may not be greenlit until AML actually has new competition in Southeast.

“I don’t want to set it up, and put a warehouse in with 25 doors and be all ready for nothing, and the consent degree doesn’t go through,” Baggen said. “So, it’s kind of a chicken-egg thing right now.”

AML’s Kevin Anderson says his company’s intent with the purchase of Northland is not to monopolize shipping in Southeast, but to expand in Seattle by acquiring Northland’s property there, and to become a full service Alaska seafood packager, carrier and marketer.

“The thing that Northland does extremely well is that they’re out in the west –Bristol Bay, Kodiak, and Dutch Harbor, I mean, some of the biggest fish runs in all of Alaska –we couldn’t play in that game,” he said.

He also says it’s been an “extremely painful” process.

“We’ve been involved in this process now for, I don’t know, close to a year. And it doesn’t seem like we’re getting any closer. It’s just one thing after another. And the amount of time and effort it takes on a lot of people’s part to put something like this together is unbelievable,” Anderson said.

Sniffen says the Department of Law hopes to have something filed in October, which would open a 60-day public comment period. Ultimately, a judge would have to sign off of on the deal. If the department can meet that timeline, Sniffen says the parties would likely know by the new year if the merger can go through.

As far as her company’s characterization as David, Baggen was lukewarm.

“I think that the history of Southeast Alaska has shown that small companies can be viable and successful and can do a really good job here, so, even though it might be a good – sort of a good analogy, I think, I think it’s OK,” she said.

That history includes echoes of another David and Goliath story. When Lynden, originally a trucking company, first got into Alaska shipping, Anderson says Lynden wasn’t taken seriously because Foss Maritime was the giant.