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Kenai Peninsula open for business

Local mayors speak about economic development at industry outlook forum

Posted: January 30, 2014 - 9:56pm
Peninsula Clarion file photoA drilling rig operating for Buccaneer Energy stands in the spruce forest alongside Marathon Road in 2011.
Peninsula Clarion file photoA drilling rig operating for Buccaneer Energy stands in the spruce forest alongside Marathon Road in 2011.

The overall theme from local mayors to oil and gas companies Thursday: the economic outlook on the Kenai Peninsula is strong and welcomes new business.

Seven community representatives from an area spanning from Homer to Seward spoke on the economic future at the Industry Forum hosted by the Kenai Peninsula Economic Development District at the Challenger Learning Center in Kenai.

City of Kenai Mayor Pat Porter highlighted capital projects like the Municipal Airport and a new Industrial Park as boons for new industry.

“With all the new interest in oil and gas development in Kenai the rumor mill is swirling with new development,” she said.

Porter said the city has experienced rapid growth in sales tax revenue since 2007. During the last six years, sales tax revenues have increased 45 percent from $155 million to $220 million with the city receiving a big boost when the Wal-Mart Supercenter opened in 2010, she said.

Kenai property values have also increased by 75 percent, a large portion of which can be attributed to the addition of the Cook Inlet natural gas storage facility, she said.

With the increase of property values up to $700 million last year, Porter said since 2007 the city has lowered its mill rate from 4.5 to 3.85 one of the lowest tax rates in the state.

Porter said the oil and gas property values have grown by nearly $35 million the past six years. She also pointed out the substantial impact oil and gas companies have on local communities involving donations to local nonprofits and schools.

“With more jobs comes more opportunities,” she said. “There is not another industry in this state that reaches so many lives.”

The Kenai Industrial Park, a 20-lot property on Marathon Road just a quarter mile from the airport, is already connected to water, sewer and electrical utilities and is ready for leasing, Porter said.

The Industrial Park has been a pet project of Rick Koch, Kenai City Manager. So far, only Buccaneer Oil has signed a 30-year lease with the city for one lot in the park, making them the only tenant.

Lease terms call for an annual rate based on 8 percent of fair-market value appraisal.

“No community could be more excited than the City of Kenai to see the resurgence of oil and gas development in whole Cook Inlet basin,” Porter said.

Kenai Peninsula Borough Mayor Mike Navarre said while all the natural gas discussions by ConocoPhillips and Agrium are exciting, the announcement that Nikiski be the preferred alternative gas line to the North Slope project “feels real.”

“The Kenai Peninsula is a great place to live, work and raise a family,” he said. “We have low taxes, excellent medical providers, the best school system in the state, responsive local governments and ample recreational activities. The economic opportunities are extraordinary.”

Soldotna City Manager Mark Dixson said in his first year working with the city, one of his primary goals was to create an Economic Development committee. He said the city wants to be known for more than, “just a strip mall on the way to Homer.”

“We want to be the number one live, work and play place in Alaska,” he said. “We want people moving their professional businesses down here.”

Homer Mayor Mary Wythe, Kachemak City Mayor Phil Morris, Seldovia City Mangaer Tim Dillon and Seward council member Dale Butts also spoke on the positive aspects of their respective communities.

Wythe said the city of Homer is “open for business” and encouraged new businesses to help expand the city’s harbor. She said while their residents are environmentally conscious which may deter industrial expansion, her outlook is optimistic that Homer’s port can attract more office space.

Morris took a contrasting view to the thought of expanding business in Kachemak City, a town with a population of 500 people.

“I don’t plan to do anything,” he said. “I’m sorry, that’s just the way we do things.”

Porter pointed to the importance the fishing industry is to the Kenai Peninsula, saying it had been here long before oil and gas was discovered.

On the busiest day of the dipnet fishery along with the current population, it is estimated that 15,000 people participate at the mouth of the Kenai River making the City of Kenai the fourth largest in the state, Porter said. With the increase of people through tourism and potential industrial development to create more jobs, Porter said the economic outlook for the area as excellent.

“This will be the year when resource development happens right in the middle of our town,” she said. “Our dream can become a reality as we continue to build a strong, vibrant community.”

Reach Dan Balmer at daniel.balmer@peninsulaclarion.com.

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