Industry leaders see bright future

Posted: Friday, February 17, 2006

From the perspective of many industry leaders, things are looking good for the Kenai Peninsula economy.

In the tourism industry, Alice Paulson, owner of the Soldotna Inn and Mykel’s Restaurant, said things have not been better.

“I’ve been in the hotel two years and the restaurant seven, and sales in the past year were up and increased at a rapid rate,” Paulson said.

She attributes much of the increase to the many people moving in with all the development in the Soldotna area.

“The Fred Meyer remodel group and the bridge helped me,” she said of construction workers who needed a place to stay and food to eat while working here.

The 2006 visitor season also looks good for Paulson.

“Usually March is slow, but with the Arctic Winter Games, it’s sold out,” she said, and predicted the coming summer “will be better than ever.”

The Kenai Peninsula real estate industry also is seen as being “very, very good from every direction,” according to Karen Carson, real estate broker with Choice Realty in Soldotna.

“Wal-Mart and Lowe’s are two big conglomerates showing positive interest in our borough,” Carson said.

She said for the past few years, house prices increased by about 3 percent on average, and last year, the increase was “at least 10 percent.”

“I really think we’re doing just great,” Carson said of the peninsula economy. She has been selling homes here for 15 years.

She said any house that is presentable and priced right is only on the market 30 days before it sells, no matter what time of year it is. Carson noted that a shortage of houses in the below-$120,000 price range exists in the industry, making it difficult to find houses for first-time buyers.

Doug Baxter, who builds homes under the banner Batir Construction Inc., said, “So far, my traffic this year is stronger than last.”

He said his business is impacted by adverse publicity, such as industrial plant closing announcements or rising interest rates, but said, since 1991, he has seen a steady rate of growth.

Baxter said rising materials costs are adding to the price of houses on the peninsula.

“Between (Hurricane) Katrina and the westernization of China, all (materials) costs have gone up,” Baxter said.

He added that the “amount of traffic coming in, the quality of customer and the desire to build all look very positive right now.”

Current low interest rates are keeping things busy in the Kenai Peninsula banking industry, as well.

The low lending rates are described by First National Bank of Alaska’s Senior Vice President Charles Weimer as being “a major driver in consumer and commercial activity from Seward to Homer and points in between.”

“From what I see, the banking business on the Kenai Peninsula remains healthy,” Weimer said from his Soldotna office.

Two areas of concern for the banking executive, however, are the low rate at which people are saving, and the ease of obtaining credit from a variety of sources.

“If individuals are using their disposable income to pay down debt rather than save ... then my concerns are overblown,” Weimer said.

“I hope that is the case,” he said.

Nationally the Commerce Department has reported that Americans’ personal savings fell into negative territory last year at minus 0.5 percent.

The figure means, in addition to spending all of their after-tax income, people dipped into previous savings or increased their borrowing.

On the Kenai Peninsula, Weimer said, “Our bank remains in great shape to continue to meet the needs of ... Alaskans and the communities in which they live and work.”

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