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Native corporations make mark in all segments of economy

Posted: Wednesday, February 25, 2004

One of the strengths of the Kenai Peninsula economy, and part of what contributes to its diversity, is the influence of Alaska Native corporations, which engage in a variety of enterprises from petroleum and forestry to tourism and real estate.

Among the most successful and financially influential is Cook Inlet Region Inc. Incorporated in 1972, CIRI is one of 13 regional corporations established after passage of the Alaska Native Claims Settlement Act.

Chief Executive Officer Carl Marrs said 2003 proved a better year than anticipated when corporate officials were putting together the annual budget in late 2002. It wasn't a barnburner, but the corporation had good income, he said.

"It was a combination of things. We were able to do things we hadn't anticipated," he said. "We had some things that were unexpected positives."

CIRI has invested in and partnered in several industries in Alaska. It is an owner of Alaska Interstate Construction, which is active in oil, gas and mining. It is a partner in Peak Oilfield Service Co., which provides construction, equipment maintenance and other oilfield services on the North Slope and Kenai Peninsula.

CIRI's financial strength and lack of debt has allowed it to venture into the gas pipeline arena. In January, CIRI announced it had joined with MidAmerican Energy Holdings Co., a subsidiary of Berkshire Hathaway Inc., to build a pipeline to transport natural gas from Alaska's North Slope along the Alaska Highway to the Lower 48.

According to CIRI's press office, the agreement means that the corporation will directly invest as an equity partner in a trans-Alaska/trans-Canada natural gas pipeline if the project proceeds. CIRI could hold up to a 9.95-percent interest in the pipeline project. In addition, CIRI said, Pacific Star Energy, a consortium of Alaska Native corporations in which CIRI also will invest, will hold up to 9.95 percent.

As far as CIRI's connection to the Kenai Peninsula, Marrs said 2003 saw increased exploration for natural gas on CIRI property, and he predicted an upturn in the oil and gas business.

He also said the peninsula could look forward to improvements in tourism. The corporation focuses its tourist and resource activities in Alaska by capitalizing on its land base and the public's interest in Alaska as a destination. CIRI owns Alaska Heritage Tours, with destination packages around the state.

CIRI also has investments Outside, including in the Hyatt Regency Lake Las Vegas Resort, the Ritz-Carlton, Lake Las Vegas, and The Westin Kierland Resort & Spa in Scottsdale, Ariz. CIRI also owns and operates the Casino MonteLago at MonteLago Village, Lake Las Vegas.

Over the past year, CIRI has done fairly well, enabling the corporate board to announce its third special distribution of $50 per share to shareholders. The average payout was $5,000.

Another Native corporation with its hands in the tourist industry is Seldovia Native Association Inc. Nearly two years ago, SNA pinned high hopes on the success of its hotel venture in Anchorage. So far, the Dimond Center Hotel has paid off, said Michael Beal, chief executive officer of SNA, though there were some hurdles to cross at the start.

"The hotel is looking like it's going to be very, very successful," Beal said. "We will make a profit this year after depreciation and interest charges. Each month it's better and better. I couldn't be more optimistic."

Beal said the association ended up cutting its hotel management company loose about halfway through the first year, choosing instead to run the operation itself. So far, that's proved to be a good move, he said.

Seldovia Native Association owns land across Cook Inlet. Last year, Beal said the association was hoping to lure wildlife enthusiasts on sightseeing ventures to Chinitna Bay. That's still in the works.

"We are working on putting a tour package together," Beal said.

As envisioned, hotel guests could step into a real Alaska adventure that could include a floatplane ride to Seldovia, a sightseeing boat trip on Kachemak Bay, perhaps a day of hiking or kayaking, watching the sunset at midnight between Iliamna and Redoubt, and perhaps a day across Cook Inlet with a flight to Lake Clark, Beal said.

Other corporation ventures include the Main Street Market, Seldovia's full-service grocery and liquor store, and Seldovia Bayview Suites, eight suites built atop the store. Beal said the store operates at a loss and is viewed as a community services. However, the suites above, he said, are doing better every year.

Meanwhile, efforts to establish daily ferry service between Seldovia and Homer continue. Currently, a state-owned ferry makes periodic trips during the tourist season, but Seldovia and Homer residents would like to see a daily service created that would serve Seldovia, Homer and other Kachemak Bay communities.

SNA has become a leader in pushing for the daily service, Beal said. Requests by SNA and the community at large led to federal appropriations of around $2 million for design and feasibility studies.

"We anticipate another $10 million for construction of a high-speed ferry sometime in not to distant future," Beal said. "This could launch a sagging (local) economy."

Kenai Natives Association board secretary Diana Zirul said KNA has no new projects under way at this time, but is continuing with its real estate leasing program. It leases out office and residential properties owned by the corporation in Kenai and Anchorage. KNA has 568 members.

Native corporations make mark in all segments of economy

By HAL SPENCE

Peninsula Clarion

One of the strengths of the Kenai Peninsula economy, and part of what contributes to its diversity, is the influence of Alaska Native corporations, which engage in a variety of enterprises from petroleum and forestry to tourism and real estate.

Among the most successful and financially influential is Cook Inlet Region Inc. Incorporated in 1972, CIRI is one of 13 regional corporations established after passage of the Alaska Native Claims Settlement Act.

Chief Executive Officer Carl Marrs said 2003 proved a better year than anticipated when corporate officials were putting together the annual budget in late 2002. It wasn't a barnburner, but the corporation had good income, he said.

"It was a combination of things. We were able to do things we hadn't anticipated," he said. "We had some things that were unexpected positives."

CIRI has invested in and partnered in several industries in Alaska. It is an owner of Alaska Interstate Construction, which is active in oil, gas and mining. It is a partner in Peak Oilfield Service Co., which provides construction, equipment maintenance and other oilfield services on the North Slope and Kenai Peninsula.

CIRI's financial strength and lack of debt has allowed it to venture into the gas pipeline arena. In January, CIRI announced it had joined with MidAmerican Energy Holdings Co., a subsidiary of Berkshire Hathaway Inc., to build a pipeline to transport natural gas from Alaska's North Slope along the Alaska Highway to the Lower 48.

According to CIRI's press office, the agreement means that the corporation will directly invest as an equity partner in a trans-Alaska/trans-Canada natural gas pipeline if the project proceeds. CIRI could hold up to a 9.95-percent interest in the pipeline project. In addition, CIRI said, Pacific Star Energy, a consortium of Alaska Native corporations in which CIRI also will invest, will hold up to 9.95 percent.

As far as CIRI's connection to the Kenai Peninsula, Marrs said 2003 saw increased exploration for natural gas on CIRI property, and he predicted an upturn in the oil and gas business.

He also said the peninsula could look forward to improvements in tourism. The corporation focuses its tourist and resource activities in Alaska by capitalizing on its land base and the public's interest in Alaska as a destination. CIRI owns Alaska Heritage Tours, with destination packages around the state.

CIRI also has investments Outside, including in the Hyatt Regency Lake Las Vegas Resort, the Ritz-Carlton, Lake Las Vegas, and The Westin Kierland Resort & Spa in Scottsdale, Ariz. CIRI also owns and operates the Casino MonteLago at MonteLago Village, Lake Las Vegas.

Over the past year, CIRI has done fairly well, enabling the corporate board to announce its third special distribution of $50 per share to shareholders. The average payout was $5,000.

Another Native corporation with its hands in the tourist industry is Seldovia Native Association Inc. Nearly two years ago, SNA pinned high hopes on the success of its hotel venture in Anchorage. So far, the Dimond Center Hotel has paid off, said Michael Beal, chief executive officer of SNA, though there were some hurdles to cross at the start.

"The hotel is looking like it's going to be very, very successful," Beal said. "We will make a profit this year after depreciation and interest charges. Each month it's better and better. I couldn't be more optimistic."

Beal said the association ended up cutting its hotel management company loose about halfway through the first year, choosing instead to run the operation itself. So far, that's proved to be a good move, he said.

Seldovia Native Association owns land across Cook Inlet. Last year, Beal said the association was hoping to lure wildlife enthusiasts on sightseeing ventures to Chinitna Bay. That's still in the works.

"We are working on putting a tour package together," Beal said.

As envisioned, hotel guests could step into a real Alaska adventure that could include a floatplane ride to Seldovia, a sightseeing boat trip on Kachemak Bay, perhaps a day of hiking or kayaking, watching the sunset at midnight between Iliamna and Redoubt, and perhaps a day across Cook Inlet with a flight to Lake Clark, Beal said.

Other corporation ventures include the Main Street Market, Seldovia's full-service grocery and liquor store, and Seldovia Bayview Suites, eight suites built atop the store. Beal said the store operates at a loss and is viewed as a community services. However, the suites above, he said, are doing better every year.

Meanwhile, efforts to establish daily ferry service between Seldovia and Homer continue. Currently, a state-owned ferry makes periodic trips during the tourist season, but Seldovia and Homer residents would like to see a daily service created that would serve Seldovia, Homer and other Kachemak Bay communities.

SNA has become a leader in pushing for the daily service, Beal said. Requests by SNA and the community at large led to federal appropriations of around $2 million for design and feasibility studies.

"We anticipate another $10 million for construction of a high-speed ferry sometime in not to distant future," Beal said. "This could launch a sagging (local) economy."

Kenai Natives Association board secretary Diana Zirul said KNA has no new projects under way at this time, but is continuing with its real estate leasing program. It leases out office and residential properties owned by the corporation in Kenai and Anchorage. KNA has 568 members.



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