2000-10-26 Economic Specialist Report. ., ~~
ECONOMIC DEVELOPMENT SPECIALIST
REPORT
Kodiak Island Borough
October 26, 2000
National Foundation for Teaching Entrepreneurship (NFTE)
The National Foundation for Teaching Entrepreneurship (NFTE) Business Camp that we
hosted last September was a huge success. This year we had hoped to offer the opportunity to
attend the business camp to students during the summer months. Unfortunately this did not
happen, although plans are underway to host during the 2000-2001 school year. We are working
with the School District to come up with a time that is the least disruptive to regular class room
activity.
Small Business Workshop
The Chamber along with the Kodiak Island Convention and Visitors Bureau and Kodiak
College hosted a Small Business Workshop in April. Fifteen people from around the island
participated in the workshop. The week-long conference brought facilitators from all over the
state to train people interested in starting a business and those already in business who may want
information on such topics as business planning, marketing, financing and web page design. We
were privileged to have as our keynote speaker, Dr. Mark Okrant from Plymouth State College,
New Hampshire. He kicked off the week with an overview of the Kodiak visitor industry and
made suggestions for improvement of our image. Financial assistance through Koniag was made
available for qualifying participants.
Foreign-Trade Zone Conference
On Apri126`~', we hosted the Alaska's Foreign-Trade Zones Discussion and Training
Session in Kodiak. We are privileged to have as our keynote speaker Mr. John DaPonte,
recently retired Executive Secretary of the U.S. Foreign Trade Zones Board. We recognize the
need for Alaskans to learn more about Foreign Trade Zones and the processes involved in
activating the zones.
Vocational Rehabilitation Program
The Kodiak Chamber of Commerce has entered a second year partnership with the
Division of Vocational Rehabilitation on the Job Creation Grant Program. The program assists
local businesses with purchasing new equipment in exchange for a commitment to hire persons
with disabilities. Four businesses received funding through the program last year. This year, we
received six (6) applications for the grant. Last year we were assured of $45,000 in funding; this
year we are in direct competition with the Juneau Economic Development Corporation for
funding of up to $95,000. The selection committee reviewed the applications, made their
recommendations and these applicants went into a pool with those chosen from Juneau. This
year 3 local businesses received funding of just over $13,000 each: Mill Bay Coffee, Cost
Savers and Island Seafoods.
Cold Storage Facility
The grant proposal submitted to the Department of Agriculture for funding to cover a
feasibility study for this project was accepted. The project investigates the use of waste-heat to
generate electricity. Representatives from Microgy, Inc. met with several seafood processors
and officials from KEA to discuss this new technology. One of the main focuses of this study is
to determine ways to utilize this new technology to reduce electrical consumption in existing
plants. A draft copy of the results of the study was presented. Basically, the recommendation of
the study was that a centralized storage facility is not feasible, given that the facility would not
be utilized by the fish processing plants as most have their own cold storage facilities. Other
factors such as a lack of available land to build a facility and no dependable source of waste heat
contribute to this recommendation. However, there is a clear demonstrated need for lower cost
refrigeration and cold storage at each processing plant. Once the final draft is completed, the
information will be made available to each processing plant for review.
Kodiak Community Profile & Economic Indicators
The Chamber continues to publish the 27-page Kodiak Community Profile, which is
updated on a quarterly basis. Hundreds of copies are distributed each year to government
agencies, non-profits, financial institutions and people interested in moving to Kodiak or starting
a new business here. The information provided in the profile is critical to those thinking of
starting a business here and also serves as good background information for those relocating to
the island. Since 1996 we have sent out over 1,500 relocation packages. The statistical
information is also available on our website. With the rapid changes in our economy it would be
hard for each person to gather all the facts and figures contained in this file.
Kodiak Chamber of Commerce and Kodiak Island Convention and Visitor's Bureau
Website
One of the benefits of Chamber and KICVB membership is free listing and links to the
www.kodiak.org website. The site has seen an increasing volume of traffic, now up to about 660
"hits" per day. To date we have had over 470,000 hits on our website. Thousands use the site
each month to find business information and to plan trips and visits. The site has undergone
many changes to make it more navigable and the new look has received a positive response by
our viewers.
Comprehensive Economic Development Strategy (CEDS) Committee
The CEDS Committee (formerly known as the OEDP Committee) meets regularly to
discuss issues of economic importance to Kodiak Island. These included such topics as fiber
optics, improving cell phone access on the island, providing Internet services to the outlying
communities and improving transportation links between cities and villages on Kodiak Island
and communities in the Aleutian chain. We have joined forces with the Main Street Kodiak
Committee in their efforts to improve downtown Kodiak.
We are strongly encouraging the outlying cities on Kodiak Island to do a Strategic Plan to
assist them in their plans for future economic development. I have offered my assistance with
this process and will meet with individual communities as needed.
~~~ ~~~ ~ ~
-- ~ +. -
~ ~..
Port Lions Cannery Proiect
On of the major projects that we are working on is with the City of Port Lions; a project
that will create a tax base for the city and provide much needed employment for their citizens.
The city wishes to rebuild their cannery that was destroyed by fire in 1976. Resolutions of
support for the project have been received from the Port Lions City Council, Port Lions Tribal
Council and the Afognak Native Corporation. Graystar Pacific Seafood, Inc will be conducting
the study. I am in the process of writing the grant application for funds to cover the study.
Kodiak Area Funding Summit
On December 11-12, 2000, the Kodiak Chamber of Commerce, Kodiak Area Native
Association and Koniag, Inc. together with the Alaska Department of Community and Economic
Development, the U.S. Department of Agriculture Rural Development and the Denali
Commission are sponsoring the Kodiak Area Funding Summit. The Funding Summit will
address the funding processes and sources for identified regional and local needs such as
upgrading of infrastructure, economic development projects and project feasibility studies. Each
community entity on Kodiak Island (municipality, tribal council and native corporation) will be
given a project proposal form to complete. Working together within their community, they will
submit two community project proposals to be reviewed by potentially relevant funding sources.
Representatives from the communities will meet in Kodiak for the 2-day Summit. Here they will
have an opportunity to meet one-on-one with representatives from various funding agencies to
discuss their prospective projects and to learn about the funding process.
.._~ _
CHANGES IN THE AREA ECONOMY
Seafood
Kodiak is consistently one of the top three fishing ports in the United States. 1999 ex-
vessel value of all fisheries into Kodiak was $100.8 million, up significantly from $79.3 million
in 1998. Volume in 1999 was 331.6 million pounds, down from 388.7 million pounds the year
before.
Employment
Kodiak's unemployment rate in 1999 decreased to 6.7% from 7.3% reported in 1998.
The unemployment rates for 1999 went from a high of 13.3% in May to a low of 3.3% in
August. These wide fluctuations continue to be a challenge for the community. There has been
an interesting shift in the top five employers in Kodiak over the last five years. In 1995, the top
five employers employed a total of 1,450 employees. In 1996 - 1,683 employees and in 1997
employment by the top 5 employers peaked at 1,998. In 1998, 1,981 people were employed and
in 1999, the number fell to 1,423. Each year at least 4 of the 5 top employers were fish
processors. 1999 was the first year the Kodiak Island School District was the largest employer in
Kodiak with 398 employees.
Population
The estimated population of the Kodiak Island Borough remained virtually steady with
only a slight increase of less than 1% going from 13,848 in 1998 to 13,989 in 1999.
Cost of Living
According to the American Chamber of Commerce Researchers Association (ACCRA)
the cost of living continues its downward trend in comparison to other U.S. cities this year. Of
the areas surveyed, Kodiak's composite cost of living for the second quarter of 2000 was
approximately 36% above the national average. At the same time last year, Kodiak's cost of
living was 41.5% above the national average. This represents a decrease of approximately 4%.
The change is not an indication that prices in Kodiak have dropped since last year, merely that
Kodiak prices did not go up as rapidly as in other urban areas in the U.S. Kodiak cost of living
has also dropped in comparison to Anchorage from 16.5% higher in the second quarter of 1999
to 10.5% higher in the second quarter of 2000.
Sales
Gross sales receipts within the City of Kodiak for the second quarter of 2000 have
increased 11%, going to $71,966,277 from $64,847,660 for the second quarter of 1999.
~~. ~~
~~~~
' ~ '~ N
~ ~ ~,
~~