Peninsula economy looking up: Experts see bright spots as business, industry moves forward

Posted: Friday, January 14, 2011

The economic outlook on the Kenai Peninsula is looking up, said government representatives this week.

Kenai's city manager, Rick Koch, summed up the general sentiment at the Industrial Outlook Forum held at Challenger Learning Center Thursday.

"We're doing well and I think we're starting to do better," he said.

Alyssa Shanks, a state economist, gave an overview of where the Peninsula is at. Although Alaska has faced some symptoms of America's recession, the state's economy fared better than other states because Alaska's economy is more government and oil driven, she said.

"Those were two pieces that were really stable, at least in our state, in the last recession," Shanks said.

And house prices (another economic indicator) on the Peninsula are still in a reasonable range, she said. They've risen over time, but dropped slightly in 2009.

"Kenai is still very affordable," she said, noting that the average house price is lower than almost any other community in Alaska that's on the road system.

But not every indicator is good. The unemployment rate on the Peninsula is higher than the national and state averages. But Shanks said that was probably due, at least in part, to the high number of seasonal jobs.

"That tends to make our unemployment rate a little higher," she said.

On a local level, central Peninsula communities are working to promote economic growth.

Soldotna Mayor Peter Micciche said that the city has taken some hits, but doing it's best to stay strong.

"We're operating a lot leaner and meaner than we used to," he said.

Despite that, the city has moved forward on a number of projects, including Soldotna Creek Park, Soldotna Community Memorial Park, and Soldotna Community Playground, which was largely the result of volunteer efforts. He noted that the library expansion is in the works after the library bond passed.

"It passed by 73 percent in the first pass," he said.

Micciche also talked about industry growth.

"We're not just bringing in the others, we're supporting the existing," he said.

The City of Kenai has spent the last six years trying to stabilize and improve its position, Koch said.

In terms of taxable sales, the numbers are going up. They went from $160 million in 2006 to $180 million in 2009, Koch said. And the first two quarters of 2010 showed more growth than predicted. Koch also talked about other areas of growth, including the city's airport and the oil and gas industry.

Participants also discussed the future.

Shanks said population predictions based on the census data suggested that the Peninsula will grow by about 19.5 percent between 2009 and 2034.

And Seward's mayor, Willard Dunham, emphasized the need for all communities to prioritize their roads.

"The Sterling and Seward Highways need to be completed," he said. "We've got to do better."

Commissioner Dan Sullivan, from the state's Department of Natural Resources, talked about two different possible futures. One is bright -- oil and gas development continues -- the other not so much. The brighter future requires partnerships, he said. He said his department will continue to try to work with the federal government on issues that affect Alaskan resources.

"This is our environment, our resources, we'd like to have input into these decisions," he said.

The forum continues today with presentations by a number of industry representatives.

Molly Dischner can be reached at

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