Forum discusses peninsula’s 2020 economic outlook

Forum discusses peninsula’s 2020 economic outlook

Industries gather at forum to discuss growth and opportunities

The fourth annual Industry Outlook Forum last Wednesday in Seward brought together economic leaders on the Kenai Peninsula and highlighted different avenues that continue to make the Kenai Peninsula, and Alaska, competitive.

The event, hosted by the Kenai Peninsula Economic Development District (KPEDD), featured representatives from industries found throughout the borough, including workforce development, tourism, manufacturing, agriculture, oil and gas, the census and the Alaska Railroad.

“We are the most diverse borough in the state,” said Tim Dillon, executive director of KPEDD and event organizer. “It’s not just all gas and oil or marine, there is so many different things we can touch on.”

AVTEC

The forum was held at the Alaska Vocational Technical Center (AVTEC), a postsecondary career and technical school that offers classes in a variety of fields, from maritime to culinary.

“Our mission is to train Alaskans to work in Alaska,” said AVTEC Director Cathy Lacompte. “We’re tightly connected to employers and are proving the training they need to be successful in the workforce.”

Recently, AVTEC ranked in the top 10% of 4,500 colleges nationwide for student return on investment by the Georgetown University Center on Education and the Workforce.

“Our students also have a completion rate of over 90% with little or no debt,” Lacompte added. “The employment rate is at nearly 90% with future earning potential over 60% more than training.”

AVTEC is funded by the Alaska Division of the Department of Labor, meaning the school has been subject to statewide budget reductions.

“In response, we aim to reduce dependence on general funds and raise more with program receipts,” Lacompte said.

Over the course of the next three years, the school’s tuition will be raised by 4% each year. This July 1, the cost of attending one 19-week term will be $2,642. By 2022, the course will cost $2,858.

“We’re not a business, but we have to act like it in some way because we have to serve,” Lacompte said.

And they do. In a typical year, AVTEC has up to 200 students across a variety of programs, not including maritime classes. Each year, the school sees between 1,100 and 1,200 mariners.

Tourism

Tourism is a big financial driver in Alaska.

Jillian Simpson of the Alaska Tourism Industry Association spoke to the forum about her group’s role in Alaska tourism.

ATIA is given money annually from the state, this year’s grant totaling $7.4 million.

“With this year’s budget, we’re about to resume presence on television,” Simpson said, something that has been lacking in the wake of budget cuts. ATIA saw a budget of $18 million in 2013 transform into $1.7 million by 2017.

“Tourism is a huge economic driver for everyone,” Simpson said. “Every day, visitors are spending $3 billion a day in the U.S.”

In 2020, 2.23 million visitors came to Alaska, Simpson said, with 30% of summer visitors going to the Kenai Peninsula.

Ten percent of Alaska visitors come from the international market, with China having the most growth potential, and German-speaking Europe maintaining a large market share.

Most visitors to the Kenai Peninsula are independent travelers, according to Simpson, but the cruise industry is growing tourism as more cruise ships make their way to different ports across the state, driving the growth of visitors to Alaska.

According to Simpson, cruise traffic across the Gulf of Alaska is up 15% and 2020 projects a 6% growth in cruise ship capacity with 606 voyages bringing 1.4 million visitors to the state.

Alaska Railroad

The Alaska Railroad Company (ARRC) is hoping to give the cruise ship passengers an improved experience in Seward by 2025.

“The big project right now is the passenger terminal,” said ARRC Project Manager Elizabeth Greer. “The repairs out there have been ongoing at about half a million a year to keep the dock alive but hopefully getting a new facility out there … It’s estimated at between $50 million and $100 million and with state funds limited right now, we’re looking at private industry to get a new facility.”

The ARRC has received two proposals from an RFP to develop and operate a cruise terminal on the 75-acre port of Seward, which has seen a 50% passenger increase since 2015, according to Greer.

“We are looking for them to design, build, finance, operate and maintain with the idea that we get a new terminal moving forward,” Greer said. “… We want a replacement or major rehab so we can continue to cruise passengers during the season. The proposal must operate and maintain the cruise terminal, promote sustainable growth of railbelt commerce and optimize opportunity.”

The ARRC has received proposals from the group Global Ports Holding PLC and Conrac and a second from Holistica Destinations, a joint venture between Norwegian Cruise Line and Royal Caribbean.

ARRC’s preliminary schedule plans to have a contract approved by April 2020.

Agriculture

The farm is a small, but a mighty addition to the Kenai Peninsula economy.

“It doesn’t take a lot of space to grow food in Alaska, about 1 to 9 acres,” said Kyra Wagner of the Homer Soil and Water Conservation District said. “The number of Alaska farms grew 30% over the past five years, going against the national trend of a 3% decrease. The number of farms on the Kenai Peninsula is up 60%. We do have an agricultural boom going on right now, so we might as well participate.”

Alongside Wagner was the Kenai Peninsula Borough’s Land Management Officer for the Agricultural Land Program Marcus Mueller, discussing the borough’s initiative to manage borough land designated as agricultural land for long-term production.

“The borough has a land grant of 150,000 acres and we estimate that there are probably about 4,000 acres that the borough could allocate to agricultural ventures … the location would suit, there’s good soils and good areas to access the lands,” Mueller said.

Mueller explained that engaging people to find interest in using borough land for agriculture has been a big part of the project, as well as finding agreements between the interested parties and the borough that would promote investment and public interest around borough land but, as the project continues to take shape he is optimistic about how it can positively impact the Kenai.

“We’re seeing more farms, more small farms, more high tunnels and more market connections. There’s more product variety and quality, more interest in food security, more local foods and food stories, and there is more farm tourism … The borough has land and is ready to engage some of its land in agriculture to facilitate this growth.”

Census

This year’s industry outlook forum saw a once-in-a-decade topic come to the forefront: the census.

Alaska has some of the lowest census participation in the nation, according to Jenny Carrol, Homer’s special projects coordinator, and it’s predicted that Alaska will be one of the hardest states to count in 2020.

“The last time around with the census, we didn’t do as good of a job as we could’ve done,” Carrol said.

This year, everyone in Alaska will be invited to respond to the census in March, with April 1 being Census Day. This is also the first year the census will be available online.

Nearly $3.2 million of annual federal funding allocations are determined by the census, and 21.8% of Alaska’s gross domestic product relies on a variety of sources of federal funding, according to Carrol.

“We only have a chance once in every 10 years to get this right, and this is the year to get it right,” she said.


• By Kat Sorensen, For the Peninsula Clarion


Seward High School students (from left) Tayten Barhaug, Lindy Guernsey and Akilena Veach demonstrate their Caring for the Kenai project, drones to help map the flood planes of Seward, during the Industry Outlook Forum in Seward on Wednesday. (Photo by Kat Sorensen/Peninsula Clarion)

Seward High School students (from left) Tayten Barhaug, Lindy Guernsey and Akilena Veach demonstrate their Caring for the Kenai project, drones to help map the flood planes of Seward, during the Industry Outlook Forum in Seward on Wednesday. (Photo by Kat Sorensen/Peninsula Clarion)

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