Haines is among the more pessimistic towns in this year’s annual survey of businesses in Southeast communities. 

About 42% of Haines’ business leaders who responded to the survey had a negative view of the town’s economic outlook and almost 20% expected they would need to cut jobs this year. 

That’s not necessarily surprising to Mayor Tom Morphet who said some of the recent economic and state-level political issues have hit Haines particularly hard. 

“Living here has never been a slam dunk,” he wrote in an email. “Canneries, mines, sawmills, a military fort all have come and gone.” 

The April survey of 440 business owners and managers throughout Southeast, conducted annually for the Southeast Conference, found the most optimism in the popular cruise ship destinations of Ketchikan, Skagway and Hoonah.

Almost half of the Hoonah businesses that responded to the survey conducted by Juneau-based Rain Coast Data said they expect to add employees over the next 12 months. Huna Totem Corp., the Native corporation for the community of about 900 people, 20 years ago developed a cruise ship destination at Icy Strait Point, near a restored century-old salmon cannery, about a mile north of the state ferry terminal. The first ship docked in 2004; several hundred thousand cruise passengers a year visit Hoonah, with a zipline, hiking trails, retail shops and other attractions at Icy Strait Point.

But in places like Haines, where pessimism about the local economy was higher, both Morphet and Haines Economic Development Corporation board member Darsie Culbeck said there are key indications of why pessimism is high – and they’re things Haines has in common with other Southeast communities. 

For instance, nearly 75% of the people who were surveyed who work in seafood, commercial fishing and mariculture said they viewed the business climate as poor. The seafood industry is facing an onslaught of economic issues including low salmon prices, high and rising operating costs, and closing processing facilities. 

“Commercial fishing is proportionally a pretty big chunk of our economy and it’s in the tank right now,” Morphet said. “(That’s) mostly due to prices but also, locally, the closure of the Excursion Inlet cannery which at one time provided Haines Borough jobs and raw fish tax revenues up to $500,000 to borough coffers.” 

Haines shares its woes with other communities like Petersburg, which heavily relies on fishing and is also among the more pessimistic of Southeast Alaska communities.  Business leaders there were the only ones in the region who were more likely to report a poor business climate than a positive one. 

“If you have kind of a dismal outlook for fishing, that could bleed out into all these other businesses,” Culbeck said. 

Another key issue is transportation. Nearly half of the business owners who responded to the survey said a continued focus on transportation is critical, though that percentage rises sharply in places like Kake, Pelican, Gustavus, and Haines, according to the report. 

“It’s funny because, you know, we’re all affected by this, by the ferries, Skagway and Haines for sure,” Culbeck said. “They don’t rate it as bad as we do and so maybe they’re so optimistic about massive cruise ship tourism, that they’re not worried about it.”

Haines relies more on independent travelers who – in turn – rely on the ferries. 

“It matters more when you see the ferry go down,” Culbeck said. “You’re like ‘Oh, that really impacts my RV park.’ Maybe you would feel more depressed because of that.” 

Many Southeast business leaders are again focusing on housing as a key obstacle to economic development. According to the survey, 61% of business leaders identified it as “critically important” to focus on over the next five years. In Haines, a 2022-23 Chilkat Valley Housing Survey found that housing costs had gone up by nearly 45% over five years. 

Culbeck identified one potential unique reason for Haines’ housing issues: a push for location-neutral jobs. 

“We’re a good place to live and you can work elsewhere,” he said. “I thought it was a good idea for a long time because you keep this place really attractive for people who can live wherever they want too. And so that means that you have a pool and you have a good library and you have recreation and, you know, all the stuff people value.” 

But while a location-neutral workforce can be resilient, Culbeck said it has other impacts on the local economy. 

“You get people making $100,000 or more online, they’re taking the housing that the guy who works at Howsers needs,” he said. “So you have this housing crunch everywhere and it drives up the prices.” 

Finally, about half of the people who responded to the Southeast Conference survey said recruiting and retaining new workers is critically important. 

“This is most strongly expressed by Juneau, Wrangell, Petersburg and Ketchikan business leaders, where three-fifths of respondents say the need to attract young professionals over the next five years is critical,” according to the report. 

Haines-specific issues 

Culbeck said one reason for the uncertainty could be that Haines has struggled to find its economic identity. 

“If you’re in Skagway, you know where your money is coming from. You’re all in for tourism – whether you like it or not. You’re like, “We know where our bread is buttered, let’s get a new dock,” he said. 

But, in Haines, the economy is much more diverse – no one industry runs the show. 

“So we always squabble over well, Is it tourism? Is it fishing? Is it government? Is it mining? Is it retirees? And so we don’t have a really unified economic vision, perhaps,” Culbeck said.  

But, he also sees a diverse economy as having more stability. 

“You can weather storms in different sectors,” he said. “I think part of [the pessimism] is that people don’t see the diversity of our economy. Okay, obviously, there’s fishing, and there’s tourism. But, you know mining is a big driver in this community both for location-neutral workers and, you know, the guys working at Green’s Creek.” 

One other thing Culbeck sees as driving uncertainty is the instability in the local government after a string of high-profile resignations from borough administration.

The borough is increasingly short-staffed in key positions, including the manager, planner, police dispatchers, a planning and zoning technician and potentially a deputy manager as well. 

“You know, the state of the borough administration would make me un-confident,” he said. 

Culbeck, who used to work for the borough, said the community’s penchant for political controversy can also take valuable time and attention away from actually resolving long-standing problems. 

“We have these controversies like Constantine right now that aren’t going to be solved for a long time but they’re going to suck all of the energy out of every single room which, to me, is the biggest negative impact of that project,” he said. “The borough can’t do anything. I mean, you can see the Lutak Dock issue. If there wasn’t a mine to talk about, we would be building that dock today. It’d be halfway done.” 

He said he sees a real opportunity cost when Chilkat Valley residents get distracted by fights over specific projects. 

“We did the same thing with heli-skiing forever. For 20 years we talked about heli-skiing and it took a lot of our resources,” he said. “I don’t know how to get around that. I’ve talked to some people, but I don’t know how we keep our eye on all that but also not let it take all of the energy out of every single room so that we can still do the stuff that needs to be done. And let’s build that public safety building or get new floats at the harbor or whatever people want.” 

Both Culbeck and Morphet said that despite the headwinds, they still consider Haines a great place to live. 

“In sum, I’d say some of the recent economic (and political) turns hit Haines especially hard. On the other hand, there are seven resident real estate agents working in Haines, two full-service lumberyards, three grocery stores, several hotels/lodges, restaurants, a hot tub factory, a brewery, a distillery … and a revived Chamber of Commerce,” Morphet said. “As always, people who want to be in Haines invest in Haines.”

Morphet recalled that Lib Hakkinen, the town’s longtime historian, once said Haines’ main occupation was “worry.”

“My own view is that Haines will prosper permanently when we make the town a truly enjoyable place to live,” he said. “That will take considerable public investment, which requires mutual trust, consensus building and cooperation. And that’s a bigger challenge.”     

The Wrangell Sentinel’s Larry Persily contributed to this report