Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

Summit: Tourism, real estate sectors rebounding


Presenters at the Haines Chamber of Commerce “Economic Summit” Saturday reported a “considerable rebound” in the local real estate market and said numbers of cruise passengers should increase by 50 percent in 2015.

About 100 residents and panelists turned out for the five-hour forum, which included business operators, officials of the Haines Borough and local non-profits, and Canadian government, business and mining officials.

Reports included:

· Constantine Metal Resources vice-president Darwin Green said his exploration company would spend $6.2 million on the Palmer project this summer, up from $2.5 million in 2013.

· Chilkoot Indian Association administrator Dave Berry reported the tribe has half the $2 million it needs to launch a wood-pellet manufacturing plant here and in the coming months would seek an appropriation for the remainder through U.S. Senator Mark Begich.

Concerns expressed included that the commercial gillnet fishery is increasingly dependent on a single species – hatchery-raised chum – and that the town’s power grid is insufficient to supply larger, industrial operations.

Using numbers from the Haines Borough, real estate agent and lumberyard owner Glenda Gilbert showed sales of improved property have increased from 23 to 33 since 2011 and that construction (land-use) permits required for larger projects have increased from 20 to 29 during the same time.

The market is a little bit more stable and increasing following a “huge nosedive” in 2008, Gilbert said. “The diversity of the economy has helped keep the real estate market in check.” She said she expects to see local homebuyers and ones from Outside in the coming year, partly because Haines has one of the least expensive housing markets in Southeast. “Haines has lots of land available.”

As for who is buying here, “there’s not a clear trend (of one type of buyer) that I can see,” Gilbert said.

Haines Borough officials are hoping a wood-pellet plant as envisioned by the CIA will allow the municipality to realize significant savings as it replaces oil-burning boilers with pellets at as many as a dozen borough facilities.

Tribal administrator Berry said the tribe has done feasibility studies showing such a plant would work here, although for at least the first few years it would need to use dry, Canadian wood as its raw product. When the project gets funding, the CIA may approach Yukon First Nations people about a business arrangement.

Commercial fishermen Bill Thomas and Jason Shull warned that a declining price for hatchery chums could spell trouble for the fleet that Thomas estimated brings $6 million annually to town.

“I’m worried about the future,” Shull said. “We can’t count on a one-species fishery for an industry, but we have… As (hatchery) chum prices go down, you’re not going to be able to make it on chums alone. We’re going to have to rely on our wild stocks, but if they don’t show up, there’s no fishery at all. That’s very possible,” Shull said.

The chum fishery also occurs more than four hours south of town, which pulls money away from the local economy, Thomas said. “We have to figure out how to boost the local wild stocks so people can stay at home and fish.”

Thomas said about 60 drift gillnet permits here is down from 110 at one time.

He said commercial fishermen should get a priority for slips at the harbor and criticized a Haines Borough effort to establish a “clean harbor” rating for the Small Boat Harbor, including by encouraging fishermen to use a vinegar solution instead of Joy soap for cleaning boats.

“We’re trying to get the harbor to be more fishermen-friendly. We are the largest industry in the borough. You need to encourage us to stay here instead of discourage us,” Thomas said.

Karen Hess, a shore excursion tour operator who is part-owner of a Haines-Skagway shuttle, said she expects a slight improvement in numbers in the coming year because the Holland America ship Zaandam will be replaced by the Osterdam, a larger vessel. Numbers of cruise passengers will jump from about 31,000 this year to nearly 45,000 in 2015, due to two additional dockings each by Princess and Celebrity ships, two calls by the 684-passenger Regatta, an Oceania ship, and six dockings by the 250-passenger French ship L’Austral.

Borough tourism director Tanya Carlson said that efforts at marketing Haines as a “backroads” docking site are paying off. Also, the arrival in Alaska in 2015 of mega-sized ships carrying up to 5,000 passengers could bump relatively smaller vessels to Haines, Carlson said after the meeting. Cruise passenger and crew numbers in 2014 will be roughly on par with 2013, she said.

Numbers provided by Hess show cruise passenger traffic has fluctuated since peaking at 187,397 in 2000. The number dropped to 40,150 in 2001, jumped to 86,974 in 2002 and bottomed out at 14,741 in 2003. It peaked again in 2008 with 41,770, then dropped to 27,263 in 2011 before climbing again. Hess said the cruise industry’s fortunes tracked significantly with the economy in the Lower 48.

Hess said spending by crews off ships is significant to port communities and that Haines should host events catering to crews, which would pay off in word-of-mouth recommendations to passengers, she said.

Hess said her company was sensitive to concerns by residents about home-porting the “fast ferry” in Skagway. She said she was amenable to bringing the boat to Haines on weekends for residents to visit Skagway. “If that’s the case, and we can make it pay for itself, we’d like to bring a boat over. So let me know.”

Hess said dropping off shore-excursion cruise passengers downtown for shopping was problematic because the passengers’ tight schedule and difficulty herding them, but her company might have more room for independents wanting to visit Haines on a larger, second boat they’ll be using this year. That boat will have capacity for 42 more passengers than the previous boat that served that purpose, she said.

Constantine’s Green said his company was expecting to hire 10-15 residents for the coming season. Operating with three drills from May until late September, the company will spend about $2.5 million in Alaska, with about $1.25 million going to the local economy, he said, in suppliers, contractors and payroll. That compares to about $476,000 for local payroll, suppliers and contractors in the past year, he said.

Gift shop owner Rodney Hinson gave a report on local retail operations limited to stores that sell non-essential items, like gifts. Such stores are staffed largely by family members, he said. Those stores have been diversifying to stay afloat, such as the town’s bookstore, which also sells toys.

Hinson said shopping at home is an important topic for such retailers and stores are sensitive to criticism about selection and price.

Heli-ski tour operator Scott Sundberg addressed the “winter economy,” saying heli-ski operators see average gross income of $260,000-$320,000 for a 10-week season, a figure that doesn’t include income from lodging and food. With an industry total of about 320 heli-skiers per season, heli-skiers bring the community between $320,000- $380,000 annually in food and lodging spending, he said.

Each operator spends about $55,000 annually for fuel, Sundberg said. The average heli-skier spends seven days here, he said.

Sundberg, who included reports on the Alcan 200, Alaska Bald Eagle Festival and Haines Ski Club, said the financial benefits of the winter economy haven’t been measured. “It is a huge reason the Haines winter economy – especially concerning controversial activities like heliskiing – do not get enough government backing. Simply put the details need to be illuminated so the pros and cons of the industry can be weighed properly.”

George Marchewa, a senior analyst for the Yukon Economic Development department, said the economy in the territory has surged 50 percent since 2003. It bottomed out that year due to closure of the Faro mine, which represented 20 percent of the region’s economy. Government represented up to 50 percent of the Yukon’s economy at that time, he said.

Today, with mines at Minto, Keno City and near Watson Lake, mining is again 20 percent of the economy, compared to 30 percent from government, he said.

The proposed Casino mine, which could be in production by 2017, would dwarf the other operations and be a “game-changer” for the Yukon economy, which is still anchored by government spending, he said. The Yukon economy, which has “flattened a little bit” in the past year with a temporary shutdown of the Keno mine, has 5 percent unemployment and a booming housing market, he said.

The territory, though, is vulnerable to changes in commodity prices and the costs of energy, Marchewa said.

Larry Beck, a board member of Inside Passage Electric Cooperative, the utility serving the upper valley, said an operating mine at Constantine would require as much as three times the electricity now generated by Alaska Power and Telephone. “A mine or any other industry faces power issues here,” he said.

Darsie Culbeck, assistant to the Haines Borough manager, expounded on growing the “location-neutral economy,” which he defined as attracting telecommuters and others with jobs outside of town – including miners at Kensington and Greens Creek mines – to relocate here.

“It’s already happening in Haines. The (borough) comprehensive plan found that 32 percent of residents receive 69 percent of their income from the mailbox,” Culbeck said. “We can make local decisions that enhance our community and make it a more desirable place to live.”

Such an economy is not controversial but enhancing it involves maintaining services and facilities, such as the swimming pool, that make the town attractive to outsiders, he said. “Losing the pool would make Haines less desirable for seniors and families and some of them will leave or simply not come in the first place.”

He suggested a marketing campaign promoting Haines as a great place to visit but an ever better place to live.

“We don’t have to build anything new, just tell our story,” he said.

Lumberyard owner Chip Lende spoke for the Chilkat Valley Community Foundation, which distributes about $12,000 to nonprofits annually. Nonprofits keep afloat programs and facilities are part of people’s decision to stay here, Lende said. “If you start whittling away at these assets, people are going to move out. Then we’re going to be in deep trouble. Keeping these assets here is going to keep people here.”

Assembly member Debra Schnabel said prejudices among residents keep them from working together. “It’s important for us to know ourselves. Until we recognize that knowing our neighbors is necessary to working together and improving our economy,” progress will be difficult, she said.

Residents also should be aware that the valley includes large swatch of land held by entities like the University of Alaska and Mental Health Trust over whom the borough has no jurisdictional control, she said.


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