CIRI, Seldovia Native Association, others bank on growth

Posted: Saturday, March 02, 2002

Whether they're rebuilding run-down homes for low-income tribal members or investing millions in efforts to extract black gold from deep in the earth, Alaska Native corporations play a major role in the economy of Alaska and of the Kenai Peninsula.

From the inauspicious beginnings in the early 1970s, many Native corporations have grown dramatically, especially in the past 10 years, according to a report produced last year by the Association of ANCSA Regional Corporation Presidents and CEOs.

That report showed that during the 1990s, corporate revenues grew 350 percent, from $570 million in 1990 to more than $2 billion in 1999. By the beginning of 2000, the 15 largest Native corporations had combined assets of $2.8 billion, not counting the market value of their lands, the study said.

Money paid out in wages, dividends and corporate charitable donations has a multiplying effect in the economy. According to Scott Goldsmith, an economist at the University of Alaska Anchorage, pumping just $1 million into the economy can create nine new jobs.

"It's not a very precise measure, of course, because it depends on whose pocket you're putting the money in, he said. "You get a large number of jobs in the trade and service sectors, because that's where people spend."

Goldsmith estimated Native corporate wages and dividends led to 4,000 new jobs in 1999. The 15 corporations themselves employed roughly 10,200 people that year.

Among the Native corporations having a major impact on the economy of the Kenai Peninsula is Cook Inlet Region Inc. In December 2000 and again early last year, CIRI made significant cash contributions to shareholders.

"We distributed over $400 million over 14 months," said Mark Kroloff, CIRI's chief operating officer. "Not all of that went to the peninsula, but we do have over 2,000 shareholders on the peninsula. Each shareholder of 100 shares got over $65,000."

CIRI's interests are varied. For instance, the corporation holds substantial subsurface mineral rights on the Kenai Peninsula on which the oil giants Marathon and Unocal currently are drilling for gas and oil. It also owns Kenai Fjords Tours and the Seward Windsong Lodge, a small hotel in Seward, enterprises that draw thousands each year, Kroloff said.

Another Native corporation betting heavily on the continued long-term growth of Alaska tourism is Seldovia Native Association Inc., which is building a $14 million, 109-room hotel in Anchorage due to open this spring.

Association CEO Michael Beal acknowledged last year that the project was "a risk," but the payoff could be spectacular, he said. An estimated 30,000 customers a year are expected to use the hotel. But the hotel, located at the Dimond Center, is a means to a bigger end.

SNA hopes to lure thousands of summer tourists from the hotel to the peninsula, to Seldovia and across Cook Inlet to 45,000 acres of pristine Alaska wilderness it owns in Chinitna Bay near Lake Clark National Park. Bear-watching there rivals McNeil River.

Also boosting Seldovia's economy are efforts by the Seldovia Village Tribe, a separate organization. With the help of its share of a $2.4 million U.S. Department of Commerce grant received last year, the tribe will build a visitors center, museum and office complex.

Richard Segura, president and chief executive officer of Kenai Natives Association Inc., said that relatively small corporation representing roughly 500 shareholders has been struggling, but making slow progress nevertheless.

"We may take one step back, but we take three steps forward," he said.

Last year, for instance, KNA was aligned with efforts promoting an 800-bed, medium security prison on the Kenai Peninsula as part of a drive toward another goal, bringing Alaska Natives incarcerated Outside back home to Alaska. That prison might well have been built on KNA land had voters not turned the idea down last fall.

Today, KNA is keeping an eye on a proposal by Whittier to build a prison there to see if there is some way to participate, Segura said.

Last year, KNA entered the communications arena, launching Alaska Native Communications Inc., which builds high-end personal computers for applications in small- and medium-sized businesses. The computers are the only ones built in Alaska and target applications that can't easily be met by off-the-shelf machines, said Mike Slezak, KNA's chief operating officer.

"These are not lightweight computers," Slezak said.

The company may one day bid on contracts in the burgeoning homeland security industry, such as for providing high-tech monitoring systems for pipelines, platforms and docks, Slezak said.

The communications company also operates the Alaska Native Training Center, an Anchorage school where students get hands-on experience building and repairing computers.

The English Bay Corporation has recently taken steps to broaden its base of enterprise by purchasing 90 acres on the Homer Spit including a barge basin, which currently handles freight traffic under an arrangement with Northstar Terminal and Stevedore Co.

"We are looking at development that would include small businesses (around the basin) and maybe a small-boat storage operation," said Don Emmal, president of the corporation.

The Kenaitze Indian Tribe and the Salamatof Tribal Council have a joint venture providing housing for local tribal members, Alaska Natives and American Indians. The housing program, begun in 1998, operates beneath the umbrella of the federal Housing and Urban Development's Department of Housing. The program funds construction of new homes and rehabilitates others for low-income Native owners, said Mary Lou Bottorff, housing director for the joint venture.

"So far, we're doing very well," Bottorff said. "Last year, we rehabbed 21 homes and built one new one."

This year, they hope to build one two-bedroom home and rehabilitate 18 others. Seven people are employed in the program, she said.

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