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High-tech organizations struggle, but optimism high

Posted: Thursday, March 01, 2001

Built with the hope of making the Kenai Peninsula a hotbed for high-technology research, education and training, three largely publicly funded organizations that have opened in the last three years are struggling to achieve the lofty goals set for them.

The Challenger Learning Center of Alaska and the Pacific Rim Institute of Safety and Management, both in Kenai, and the Alaska SeaLife Center in Seward, trail the financial expectations expected of them, and all are still some distance from self-sufficiency.

Congressional appropriations -- largely through the auspices of Alaska Sen. Ted Stevens -- are propping up the Challenger and SeaLife centers, while private money from AAI Engineering Support Inc., of Maryland, is subsidizing PRISM.

PRISM

"We are taking a pretty severe loss every year," said Dave Burnett, PRISM director.

The PRISM campus is owned by the city of Kenai, but AAI-ESI owns and operates the residential and industrial firefighting props and leases the facility from the city. It was built with $11.5 million in federal money through the Federal Aviation Administration, $3 million from AAI-ESI, and $2.7 million of Kenai Airport Fund money.

 

Dave Burnette

"There's not a penny of (local) taxpayers money in it," Burnett said.

Kenai Mayor John Williams, who was in the forefront of advocating for PRISM and the Challenger Center, thinks the fire training center is doing OK, for now.

"I think it's going as well as can be expected for a new start-up enterprise," he said. "It's done quite a bit in my opinion to boost the economy in the area by bringing in a lot of new people, who stay at our hotels and rent our cars and so forth."

But collateral benefits to the city notwithstanding, AAI-ESI will only hang on for so long without making a profit, Burnett said.

 

Clarion file photo

The Alaska SeaLife Center continues to draw visitors in Seward.

Peninsula Clarion file photo

Burnett said PRISM lost about $230,000 in each of the three years it's been open. The break even point is $500,000.

He said for a company as large as AAI-ESI, the losses aren't that large, but he is committed to stemming them.

"ESI wants to recoup their investment, and I'm going to make it work somehow, or bust my butt trying," he said.

"It takes five years to build a business, and we're going into our fourth year and

we're darn close," he said. "There's no point in throwing up our hands now."

PRISM is one of 14 such high-tech training schools in the nation, and, according to Burnett, it is the only one offering year-round training.

It employs three people full time, two part time and numerous instructors on a contractual basis.

"We have $100,000 a year in teaching fees," Burnett said.

PRISM offers 30 different courses, including industrial, aircraft and residential firefighting, EMT training and first aid classes.

But to stem the losses and turn a profit, Burnett said PRISM is looking to expand its offerings.

"There's a big push now for anti-terrorist and SWAT training," he said.

SWAT stands for special weapons and tactics, which is paramilitary training for police agencies.

An addition to PRISM -- one that is just peeking over the horizon -- is adding maritime firefighting to the school. Williams has expressed interest in acquiring the Homer-based Coast Guard buoy tender Sedge, which is due to be decommissioned, for that purpose.

Burnett said the Sedge could either be dry-docked on the Kenai waterfront or partially dissembled and transported to PRISM. The Sedge project is only in the conceptual stage, Burnett said, but it could be a reality if it is pursued.

"If anybody can get the Sedge, it's the mayor. He can get anything," Burnett said. "But ESI would want to see contracts (to train on it) in place before they bought into it."

Burnett also plans to increase the number of fire academy courses offered for firefighters and emergency medical technicians. He has offered two classes a year in the past, but plans for a third this year, which will be an evening class for residents interested in looking at fire and emergency services as a career.

"It's for local kids or people who are interested in a career move but can't give up their day job," he said.

PRISM also is pursuing more outreach, including sending instructors to Russia.

"We want to pursue more Pacific Rim countries," he said. "That's why Pacific Rim is in our name."

Challenger Learning

Center

Another pet project of Kenai's mayor, the Challenger Learning Center of Alaska, is housed in the Ted and Catherine Stevens Center for Science and Technology, a name that acknowledges the center's greatest benefactor and his wife.

The Challenger Center, which opened in April 2000, is named for the doomed NASA space shuttle Challenger, which exploded in 1986, killing all on board. The families of the lost astronauts founded the Challenger centers to encourage interest in math, science and technology in children.

Daniela Martian has been the flight director since before the center opened at its downtown Kenai location next to Kenai Central High School. (See related story, page D-1.) With the help of assistant flight director Rob Carrillo, she coordinates and leads simulated space missions for students and corporate groups.

The missions consist of the students, who are split into two groups -- ground control and the space crew -- sitting before computer monitors, which they use to call up specific information regarding their specific task, such as their trajectory through "space" and environmental factors aboard the "space craft."

The center's simulator is highly reliant on cutting edge computer technology and is powered by a bank of 17 Apple Macintosh G3 computers, which Martian must maintain.

She said there are very few technophobes among children today, and they are all very comfortable with the high-powered computer equipment they have to work with, especially since the computer operating systems underneath the programs are almost completely transparent.

"Computers are second nature to them," she said. "During the mission, they're not keyed in to, 'I'm using a computer.'

"They get most jazzed by the robotics lab."

One of the many activities at the center is building robots. Martian has visions of designing one herself, along the lines of the Sojourner rover sent to Mars on NASA's Pathfinder mission.

Martian also would like to design her own missions so students can simulate being earth scientists studying Alaska.

"There are a lot of cool things we could do with Alaska's minerals, aurora borealis, weather, geography and geology," she said.

But all of that costs time, which costs money, which should come from fees collected for usage. And that's not happening quite yet.

However, according to Williams, who is the chair of the center's board of directors, the center ran a $100,000 deficit in 2000. With the addition of Soldotna City Council member Steve Horn as executive director, the deficit will be $200,000 in 2001.

The difference will be picked up for the next two years through a $1 million NASA grant, secured by Stevens. Williams is optimistic the grant and the new director it funds will allow the center to develop additional features and capabilities that will allow it to be self sustaining.

"There is a second phase that I hope to ask Congress for in the next cycle," Williams said. "For $3 million we can build three classrooms, two bunk rooms with space for 16 students on each side, a high-tech computer center, showers and food service."

Those capabilities will allow for week-long summer space camps, multiple-day seminars for students and industry groups and immersion training for teachers.

Williams said there is no concern with visiting students using bunk houses taking business away from area hotels.

"It will be mostly for kids, and I envision mom and pop staying in hotel rooms and going fishing as their kids stay at the Challenger center," he said. "I believe local hotels and motels will benefit from it."

Likewise, the kitchen facilities could be used by area food service companies to prepare meals for students, and thereby not taking any business from them.

Any expanded use of the center would put more dollars into the local economy, Williams said.

One-day missions cost $750 to fly, he said, but the center is only charging $475. The difference is made up, he said, by charging corporate customers more.

"But on a week-long mission, we will more than break even," Williams said.

Another way to turn around the center's finances is through a deal with the state's university system.

"We're developing an ongoing partnership with the University of Alaska to use its foundation for fund raising," Williams said.

"It's a very unique process with the university; corporate taxpayers can make donations directly to it instead of paying taxes to the state."

Williams said corporations can designate all or some of their donation to the Challenger center.

The center is also exploring the idea of a 1 percent surcharge on rocket launches at the Kodiak Launch Facility. At about $1 million per launch, the Challenger Center could receive $10,000 every time a rocket leaves the ground.

"It won't take a lot to break even. I'm very optimistic," Williams said. "Two years from now, we'll be at the break-even point."

Alaska SeaLife Center

The situation at the Alaska SeaLife Center in Seward may be a bit different. Costing millions of dollars a year to operate, the center has a much higher overhead than the two Kenai entities.

In its brief three-year history, the center has managed to remain afloat, despite attendance that has consistently fallen short of expectations and an ongoing struggle to stabilize management and develop financial self-sufficiency.

The 115,000 square-foot waterfront facility pursues a unique, three-part mission combining scientific research, wildlife rehabilitation and public education. Its goal is to promote understanding and maintenance of Alaska's marine ecosystems.

The project had been a dream in Seward for many years, but the 1989 Exxon Valdez oil spill provided motivation and funding. In 1990, advocates formed the Seward Association for the Advancement of Marine Science to develop a facility. The city of Seward donated use of 7 acres on the waterfront, and construction began in 1995.

By the time the SeaLife Center opened in May 1998, its price tag was about $56 million. Most of the funding, $37.4 million, was oil spill dollars via the Exxon Valdez Oil Spill Trustees Council and the state's settlement restitution. The city of Seward issued revenue bonds totaling $17.5 million. Private donors made up the difference.

The center planned to use public admission income to subsidize research and rehabilitation. Visitors come to admire the sea mammals, sea birds, fish and other aquatic life on display and to participate in educational programs for all ages.

But attendance, especially during the winter months, failed to match the projections boosters made beforehand. The first year of operation, visitor numbers were about 19 percent below expectations and the center lost $1 million on its research ventures. It also became embroiled in a lawsuit with the building contractor.

In early 1999, the board of directors instituted an austerity plan to shore up the financial foundation.

Since that time, the center has garnered support from the federal government through a series of grants engineered by Sen. Ted Stevens. Most recently, $14 million was appropriated through the National Oceanic and Atmospheric Administration. The construction lawsuit was settled to the center's benefit. And increased funding for Steller sea lion research is coming into the center.

The center now is on its fourth director. In October, Tylan Schrock, who had worked for the city of Seward, replaced Dr. Mark Lloyd, who, like his two predecessors, left after one year at the helm.

"I bring administrative skills to the executive director position, which helps me balance the various components of the center's mission," Schrock wrote in the winter members' newsletter.

"I look forward to helping the center move from a start-up organization to an established organization that continues to gain respect for its state-of-the-art facility, education programs, exhibits and important research and rehabilitation projects."



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