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Native corporations have varied, positive affect on peninsula

Posted: Thursday, February 17, 2005

 

  A youth working on a Cook Inlet Tribal Council project plants trees near a Marathon Oil Co. pipeline several years ago. Clarion file photo by Doug Loshb

A youth working on a Cook Inlet Tribal Council project plants trees near a Marathon Oil Co. pipeline several years ago.

Clarion file photo by Doug Loshb

Alaska Native corporations engaging in enterprises ranging from petroleum and forestry to tourism and real estate has a positive influence on the economy of the Kenai Peninsula.

One of the most active and most successful among the 13 regional corporations established after the passage of the 1971 Alaska Native Claims Settlement Act is Cook Inlet Region Inc., or CIRI. It is a partner in ownership of Alaska Interstate Construction, which is active in oil, gas and mining. CIRI also is a partner in Peak Oilfield Service Co., which provides construction, equipment maintenance and other oilfield services on the Kenai Peninsula and North Slope.

In January of last year, the company's financial status allowed it to venture into the arena of pipeline construction, joining with MidAmerican Energy Holdings Company and Pacific Star Energy in a proposal to build a pipeline from the North Slope to the Lower 48 and negotiate tax and financial terms under the state's "stranded gas" regulations.

What looked promising in January, however, had fallen through by March when the state rejected MidAmerican's approach. MidAmerican withdrew its application to the state under the Stranded Gas Development Act and did so with the approval of its two partners.

But CIRI had other gambits in the works. Late last year, CIRI formed a CIRI-controlled joint venture with T-Mobile USA to pursue Personal Communications System licenses from the Federal Communications Commission through an auction scheduled for Jan. 26. It may be many months before winners are declared.

"The auction is under way, but it takes many days to conclude," CIRI CEO Margie Brown said late last month. "We won't know the results for some time."

CIRI also has large land holdings on the Kenai Peninsula that include the rights to the oil and gas reserves beneath. The corporation has an ongoing leasing program and is leasing access to Aurora Gas LLC, Unocal and Marathon Oil Co..

"We are seeing increased interest in finding natural gas on the Kenai Peninsula, and we see that trend continuing," Brown said.

Brown also noted an ongoing tree-planting program conducted by a nonprofit affiliate, Cook Inlet Tribal Council, which runs a summer youth camp. More than 650 young people have participated since 1999, planting more than 550,000 spruce seedlings on CIRI land devastated by the spruce bark beetle infestation. The camp also has let youths participate in trail rehabilitation projects around the peninsula, Brown said.

CIRI's success has meant dividends to its shareholders, who last year got $11,875 for every 100 shares. The corporation has paid dividends consistently since the mid-1980s, Brown said.

In December, longtime CEO and President Carl Marrs stepped down, ending more than 30 years of service with CIRI. According to CIRI Chair William Prosser, during Marrs' tenure, the corporation had increased its assets by more than 47 percent while paying its shareholders $650 million in dividends.

The CIRI Board of Directors selected Brown, a Yup'ik Eskimo, to succeed Marrs. She took over Jan. 1. Brown has been a board member since 2002 and previously served on the board from 1984-87. She has worked for CIRI since 1976.

"I'm very excited and quite honored," she said. "It is a real privilege to serve. I'm excited about the prospects CIRI has for its future growth."

Another corporation active on the Kenai Peninsula is the Seldovia Native Association, currently overseeing an expansion of its interests in the tourism industry and real estate.

The corporation's flagship is the Dimond Center Hotel in Anchorage, which opened in 2002. During its first full year in operation (2003), the hotel realized just over $3.04 million in room revenue. In 2004, it saw that number jump to nearly $3.44 million, representing 78 percent occupancy, rarely achieved an Anchorage hotel, said Michael Beal, CEO of SNA.

"And we have every expectation of continuing our revenue growth in 2005," he said.

The company has been working to link its Anchorage hotel, Seldovia itself and land across Cook Inlet in excursion packages for tourists who want something a bit out of the ordinary.

SNA recently formed a limited liability corporation with Homer-based contractors Bob Brant and Chuck Jay called Red Mountain LLC. According to the corporation's May 2004 newsletter, the company intends to secure an 8A designation with the federal government, allowing it to start bidding on federal projects.

"The company has, in effect, been operating for three months and we are applying for 8A designation with the Small Business Administration and hoping to receive that designation in the first half of 2005," Beal said.

SNA also is actively lobbying for a daily ferry service across Kachemak Bay. The state of Alaska has appropriated $2 million in federal money toward design and development of a ferry.

"We've also applied for a $12 million grant," Beal said.

About $2 million of that would go for landings and dock sites, and $10 million would be used to build the ferry, he said. Six million dollars has already been appropriated.

"We're making really good progress," he said. "Right now I'm running through the bureaucratic hoops."

All in all things are going well, Beal said.

"2004 was a good year, and 2005 should be an outstanding year for us," he said.

Messages left for comment from Kenai Natives Association were not returned.



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