by jennifer e. garrett
Spotlight: Alaska
IS ALASKA OPEN FOR BUSINESS? THAT DEPENDS ON WHO YOU ASK. THE TAX FOUNDATION
RANKED IT AS THE SECOND-MOST BUSINESS-FRIENDLY STATE IN THE U.S., BUT FORBES
RANKED ALASKA AT NO. 42 AND CNBC RANKED IT DEAD LAST.
The Tax Foundation gives Alaska high marks for the low tax burden shouldered by the state’s residents, but critics say it fails to take into account corporate taxes and high workers’ compensation costs,
according to the Anchorage Daily News.
The state’s economy is strong, largely bolstered by its large oil reserves. Alaska gets the majority of its
tax income from oil taxes, which have led to a $1.9 billion surplus for the fiscal year ending this month.
The seafood industry is the state’s second-largest, employing more than 70,000 people and generating
more than $3 billion a year, according to a report from the Marine Conservation Alliance.
A recent film tax credit has helped to diversify the Alaskan economy somewhat. A study done by the
McDowell Group showed that the feature film, “Everybody Loves Whales,” filmed in Alaska this past
year, brought $16.5 million to the state’s economy. The credit is set to expire in 2013, but a bill extending it an additional 10 years was brought to the state legislature this past March.
Anchorage Multifamily
Asking rents for apartments in Anchorage have been steadily increasing since late 2009. In the fourth
quarter of ’09, average asking rents
were $971; this past fourth quarter,
they were $1,021, according to Reis
Inc. Vacancy rates also have been
positive, hovering around 2 percent
for the past year.
ANCHORAGE APARTMENT VACANC Y RATES AND ASKING RENTS
Source: Reis Inc.
Vacancy rates likely will remain low
as new construction for multifamily
units has been declining. In 2010,
190 new multifamily units came online, a decrease from 335 units in 2009, according to the Alaska Housing Finance Authority. The $35 million redevelopment of Loussac Manor is one significant project currently under way in Anchorage. The 50-year-old public-housing project is being demolished and will be
replaced by 120 new rental units and a community building. The project is slated to be finished in 2013.
3 Cities to Watch
FAIRBANKS
Construction on a new $109 million life-sciences
building began this past March at the University
of Alaska Fairbanks. The facility was in the works
for more than 12 years before funding was finalized this past November. Scheduled for spring
2013 completion, the building will house new classrooms, offices, lab facilities and an auditorium.
JUNEAU
Alaska Glacier Seafoods has acquired a three-acre
site near Juneau International Airport to house a
new logistical support center for the company, in
addition to space for equipment storage. The move
is seen as a step toward making the city a key logistics area for Southeast Alaska fisheries, according
to the Juneau Empire.
Industry Focus: Tourism
The recession and subsequent decline in cruise-ship visitors have affected the Alaska tourism industry.
This past summer was the third consecutive season of declining visitor volume. Indicators are starting
to look up, however. Last year, non-cruise-related traffic increased by 9 percent from 2009. In addition,
Anchorage hotel-room sales increased 9 percent from ’09, and average room rates also showed positive movement. Juneau’s room rate increased 6 percent from ’09 to ’ 10, and Anchorage saw a 5 percent
increase, according to Hotels.com.
UNEMPLOYMENT RATE
Unemployment
Alaska has weathered the recent
recession better than the U.S. as
a whole. Although unemployment
has increased in Alaska since the
economic crisis, it has not seen the
drastic increases other states have
suffered. In fact, unemployment
peaked at 8.2 percent in February
2010 and has been slowly inching
down since.
Source: U.S. Department of Labor
This past February, the state’s un-
employment rate was 7. 6 percent,
well below the national average of 8. 9 percent. According to the state’s Department of Labor and Work-
force Development, Alaska nonfarm-payroll employment increased by 8,600 jobs from February ’ 10 to
this past February. Educational and health services saw the biggest increase, with 2,300 jobs added.
Jennifer E. Garrett is an associate editor at Scotsman Guide. Reach her at (800) 297-6061 or jenniferg@scotsmanguide.com.
KETCHIKAN
Power Systems and Supplies of Alaska purchased
almost 350 acres of tidelands and uplands in Ward
Cove this past April. The $2.1 million purchase will
help the company move forward with plans to expand its current operations. The company also has
several different ideas for how to use the property,
including a commercial and industrial marina.
WHAT THE LOCALS SAY
“The overall volume of transactions is down over the
last several years, but values have held strong. It’s a
stable market for investors to come to. We’re not seeing the big fluctuations up and down, and we haven’t
for more than 20 years. It’s a really stable market,
and I think it’s going to continue along those lines.”
MARK FILIPENKO, ASSOCIATE BROKER,
BOND, S TEPHENS & JOHNSON INC.
Sources: Alaska Department of Commerce, Community & Economic
Development; Alaska Department of Labor and Workforce Development;
Alaska Housing Finance Authority; Anchorage Daily News; Bloomberg;
Cook Inlet Region Inc.; Fairbanks Daily News-Miner; Hotels.com; Juneau
Empire; Reis Inc.; SitNews; U. S. Department of Labor
