Native corporations play increasingly important role in region's economy

Posted: Tuesday, February 25, 2003

Alaska Native corporations and their shareholders play a significant role in the economy of the Kenai Peninsula, engaging in a variety of enterprises, among them real estate, housing, tourism, hotel operations and the petroleum industry.

That influence has grown in the last year and is evidenced by recent activity of the corporations.

Seldovia Native Association Inc., for example, opened the doors of its new Dimond Center Hotel in Anchorage on June 1 of last year. It's a venture corporation officials hope will lead to increased tourism in Seldovia itself as well as at corporation holdings on the west side of Cook Inlet at Chinitna Bay, where they hope to lure wildlife enthusiasts for sightseeing ventures.

Executive Director Michael Beal said so far the hotel has exceeded expectations, actually turning a profit in the seven months it operated during 2002.

"We are really excited," Beal said. "We opened under bad economic conditions and in the wake of 9/11. We're excited about the accomplishment. A first-class hotel there makes sense. It's one thing to think it makes sense, another to see it make sense."

The auspicious beginnings may not be sustainable in the short term, Beal cautioned, though the corporation remains optimistic.

"There might be a skinny year or two ahead while we deal with an Iraq war and the slow economy, but we're confident the hotel will do really good," he said.

The opening of the hotel had an impact in Seldovia almost right away, as bookings at the Seldovia Bay Suites, another hotel owned by the corporation, went up.

"We are also pushing a lot of other activities, like bed and breakfasts," said Beal, who appears weekly on an Anchorage radio station's Saturday travel show to pitch the Anchorage hotel and the community of Seldovia.

Seldovia lacks many of the transportation facilities other communities take for granted, but Beal said the corporation is working with Rep. Don Young and the federal Department of Transportation to get a daily ferry to Seldovia that would be based in Seldovia. The ferry would serve Kachemak Bay.

Meanwhile, the Seldovia Vil-lage Tribe, a separate organization, has begun construction on a museum-visitors center that will also house new tribal offices. The village tribe also has launched a health clinic in Homer.

"We are really cooking," Beal said. "Between SNA and the village tribe, we are going full bore."

A few years ago, the small English Bay Corporation invested heavily in purchasing 90 acres on the Homer Spit that included a barge basin. The barge basin is by Northstar Terminal and Stevedore Co. under and agreement with the corporation.

Don Emmal, president of the corporation, said the corporation spent a lot of time and money last year doing earthwork to protect the shoreline along the property and preparing other areas for future enterprises, including a planned 80-unit recreational vehicle park.

"This is a fairly major project for us," he said. "We spent a year getting the property ready. We will be looking at another development that will be complementary to the uses permitted under city zoning, probably boat storage."

The English Bay Corporation has approximately 80 shareholders, Emmal said.

Mary Lou Bottorff is the housing director of an ongoing joint venture between Salamatof Tribal Council and the Kenaitze Indian Tribe. That joint venture provides housing for local tribal members, Alaska Natives and American Indians. Begun in 1998, the program is run under the umbrella of the U.S. Housing and Urban Development's Department of Housing, which provides funding.

Last year, the venture built one new home and weatherized 18 more. This year, it hopes to build perhaps two more homes and weatherize another 10 to 15, Bottorff said.

The group also has a joint venture with Cook Inlet Housing Authority to rehabilitate houses it owns on the peninsula.

Salamatof Native Association Inc., meanwhile, is in the real estate business.

President James Segura said the corporation is relatively healthy. It has 129 shareholders.

Last year, SNA built a 6,000-square-foot office building on Willow Street in Kenai, which now houses a social service program run by the Kenaitze Indian Tribe.

Segura said the 2,500 square feet the program left behind in another corporation building in order to move into the expanded spaces also has been rented.

"We are completely filled up," Segura said.

Altogether, the corporation has four buildings, which are entirely rented, he said.

Other ventures include property sales in several subdivisions the corporation owns in the central peninsula.

Among the local Native corporations, Cook Inlet Region Inc., by far has the largest financial impact on the peninsula economy.

In early 2000 and again in 2001, CIRI made substantial cash contributions to shareholders, distributing more than $400 million over 14 months. Not all of that went to the peninsula, but there are more than 2,000 shareholders living on the peninsula, according to CIRI. The corporation holds subsurface mineral rights on the peninsula, as well as tourist businesses in Seward.

"This year, although there was not a special distribution, we still have the largest dividends of any regional corporation in Alaska," said Mark Kroloff, CIRI's chief operating officer. "That amounted to a little over $21 million last year. About a third of that goes to the peninsula."

Kroloff said there was some drilling activity on its peninsula lands, but no discoveries were made.

However, there is renewed interest in oil and gas on their subsurface holdings, he said.

CIRI is a partner with Peak Oil Service Co., which has operations on the peninsula and does work for such companies as Agrium and Aurora Gas, Kroloff said.

Last year, CIRI expanded its tourism businesses in Seward, enlarging the Seward Windsong Lodge to nearly 100 rooms and upgrading its Resurrection Road-house Restaurant and gift shop.

It also added new routes to its popular Kenai Fjords Tours, Kroloff said.

Kenai Natives Association Inc., another Native corporation on the peninsula, owns about 20,000 acres in the Kenai area and has roughly 500 shareholders.

KNA has been a major player in the state's charitable gaming business but ran into financial difficulties last year.

Wayne Wilson, president of KNA, was unavailable for comment for this story.

Carol Dolan, vice president of the corporation, said KNA has "gotten passed" its money problems. She declined to elaborate.

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