3rd Quarter, 2011 AEDCconnections The Newsletter Of Anchorage Economic Development Corporation

WHAT’S INSIDE Diamond Investor Spotlight

page 2 More Fuel Means More Letter From The President

page 3 Opportunities at ANC

JetBlue Airways: Big Start Strategically located just 9.5 hours from 90% of the industrialized world, Ted Stevens Built on Local Partnerships Anchorage International Airport (ANC) is ranked fifth in the world for cargo throughput and second in North America for landed weight. Shipping via Anchorage means planes can page 4 carry more cargo and less fuel, potentially adding up to $90,000 in additional revenue per flight. With stats like that it’s easy to see why so many international cargo flights choose to Partnership at Work in refuel in Anchorage before continuing on to their destination. Redevelopment of Loussac Manor With the national economy recovering and flight frequencies reaching 2007 highs – when ANC saw about 700 wide body landings a week – ANC is seeing more pressure to ensure page 5 an adequate supply of jet fuel. This would normally be seen as a good thing, a sign of growth. However at ANC, this has become somewhat of a problem as the airport itself is Mapping Cooperation neither a buyer nor a seller of jet fuel.

page 6 In the past this was a non-issue as most of the jet fuel was purchased from Flint Hill Refinery in North Pole and shipped to ANC via railroad in about 1 million gallon Cargo Transfer: Open for Collaboration increments. Now, much of the fuel is purchased from out–of–state sources and shipped to ANC via tanker in about 14 million gallon increments.

page 7 ANC’s ability to handle additional flights is dependent on the availability of jet fuel. Currently, there are 20 million gallons of fuel storage at ANC and another 20 million Anchorage First Thanks Participants gallons of storage located at the Port of Anchorage that is all managed by the Anchorage Fuel Consortium. Airlines at ANC use roughly 14 million gallons of fuel a week. This means that when all the tanks are full there is about three weeks worth of fuel on hand.

In order to unload a 14 million gallon tanker the 20 million gallons worth of fuel storage tanks at the Port of Anchorage must be nearly empty. With airlines at ANC using roughly 14 million gallons of fuel a week, that leaves about a week and half of fuel on hand at ANC. This means any delay in tanker arrival has potentially devastating consequences.

The Anchorage Fuel Consortium has recently announced plans to add four additional fuel storage tanks at ANC, expanding the current fuel park from five to nine tanks. The project is expected to cost about $25 million and will provide 16 million gallons of additional fuel storage for a total of 36 million gallons at ANC. This extra capacity will relieve the current pressure of fuel shortages and hopefully allow for additional flight capacity at ANC. The project is looking at a completion date sometime in the fall of 2012.

1 Copyright ©2009 Pictometry International Corp. ECONOMIC SNAPSHOT

TSAIA Cargo Transit (thousand pounds), 1st Quarter AEDC 948,510 823,322 Letter From 560,710

2009 2010 2011

In the first quarter of 2011, 949 million The President pounds of cargo transited through Ted Stevens Anchorage International Airport, an increase of 15 percent from the first quarter of 2010, and an increase of 69 percent from the first quarter of 2009. Pre-recession, first quarter cargo transit volume was as high as 1.2 billion pounds in 2008. In business, it’s natural to think strategically if you want to be successful. How do I achieve Residential Building Permit Values my objectives? What are the opportunities and (million), 1st Quarter

how do I prioritize them? Are there obstacles or $22.8 challenges that I must overcome? And at the end $17.4 $15.0 of the day, how do I measure success?

As you contemplate these and many other considerations, the thought may strike you that a strategic alignment may be needed to improve your odds for success. 2009 2010 2011 Residential building permit values totaled And that’s the theme for this month’s newsletter. Cooperation and collaborations $22.8 million for the first quarter of 2011, an increase of 31 percent from the first that grow the economy of Anchorage and Alaska. quarter of 2010, and an increase of 52 percent from the same period in 2009. The highest level for residential building permit values over the last six years was $32.6 In this issue, we will profile many examples of innovative cooperation and million in 2007. collaboration that are generating new business opportunities, new infrastructure,

new competitive innovations and ultimately new jobs. Innovative alignments Commercial Building Permit Values created within both the private sector and between businesses and government. (million), 1st Quarter $107.6 $80.0 You’ll read about how JetBlue has aligned with longtime local businesses for key ground services and as customers that have helped set record cargo volumes for this $40.6 innovative air carrier. You’ll also learn about a division of Aerometric, DAT/EM Systems International, that’s developed exciting new mapping tools that are being used to bring Alaska’s outdated topographic maps into the modern age. 2009 2010 2011 Commercial building permit values totaled $80 million for the first quarter of 2011, an increase of 97 percent from the first And consider the exciting opportunities offered by Ted Stevens Anchorage quarter of 2010, but down 26 percent from International Airport (ANC) to cargo carriers. In this issue, we profile the unique the same period in 2009. cargo transfer rights international carriers can take advantage of, as well as the Average Price of Single Family partnerships these rights may now offer between domestic cargo forwarders and Housing Units Sold, 1st Quarter

foreign air cargo carriers. We also talk about the infrastructure needed to support 327,429 314,978 319,448 this growth through the addition of four new fuel storage tanks that the Anchorage Fuel Consortium has commissioned to be constructed.

New partnerships can show up in unexpected places, even in housing developments. Cook Inlet Housing Authority and Alaska Housing Finance Corporation are teaming in a redevelopment of the Loussac Manor that will provide 120 much 2009 2010 2011 The average price of residential housing needed affordable workforce housing to Midtown. units sold in Anchorage in the first quarter of 2011 was $319,448, a decrease of 2.4 percent from the first quarter of 2010, but 4 percent higher than the first And finally, you’ll read about the successful second year of the “Anchorage quarter of 2009. First” buy local campaign initiated by AEDC, a collaboration marketing effort Number of Residential involving local businesses, media outlets and non-profit organizations focused Housing Units Sold, 1st Quarter on the local economy. 436 417 Cooperation and collaboration. Very effective tools if used correctly as these 397 examples demonstrate. When interests align, the outcomes can be very rewarding!

2009 2010 2011

In the first quarter of 2011, 417 housing units were sold in Anchorage, 5 percent more than in the first quarter of 2010, but 4 percent less than in the first quarter of 2009. The highest first quarter level of Bill Popp housing units sold in the last six years was 579 in 2006. President and CEO, AEDC Economic data compiled by 2 JetBlue Airways: Big Start Built On Local Partnerships

JetBlue Airways is off to a big start in the Big Wild, our continued partnerships with NAC and Lynden having broken its own cargo records just one week International, and to a growing relationship with the after the airline’s inaugural flight to Anchorage. Not local freight forwarders throughout this year and in only did the value carrier with high-quality service years to come.” surprise and delight customers from the minute it landed, but it also transported a whopping 17,400 JetBlue launched service between Anchorage, its 65th pounds of Copper River salmon to Long Beach, destination, and Long Beach on May 23, becoming California, the airline’s highest-ever cargo trip in terms the only airline to serve Anchorage from the southern of poundage. JetBlue saw subsequent successful cargo Los Angeles basin. The ability to connect these two loads and continues to enjoy a healthy cargo operation cities has opened many doors not only for cargo out of Anchorage. expansion, but for business and personal travel as well. As the biggest airline in Long Beach, JetBlue offers Anchorage is JetBlue’s 33rd cargo city. The New York- connections around the lower 48, making travel for based airline began shipping seafood and fish products Alaskans even easier. The new service, offering daily in September 2006, and is pleased to welcome seasonal flights for the summer, also means additional Anchorage to the expanding network of cargo cities. access for business travelers flying between Alaska and the Continental United States. The cargo team at JetBlue first looked to Anchorage to increase revenue and to foster relationships with Anchorage and JetBlue seem a natural cultural fit – a freight forwarders. JetBlue is pleased to partner with city built on the idea of Big Wild Life in collaboration Northern Air Cargo (NAC) and Lynden International with an airline founded on the principles of serving and recognizes that the early success it is seeing is a one another and treating people right – make for a result of that collaboration. Carl Shipsky, Manager partnership with lots of potential for fun and future of Mail and Cargo Sales relays, “We look forward to business development.

3 AEDC Partnership at Work In Redevelopment Creating a new look for affordable housing, providing a mix of low-income and workforce housing in one midtown development

Loussac Place concept rendering

Cook Inlet Housing Authority (CIHA) has been CIHA is proud to represent the development team, selected by the Alaska Housing Finance Corporation which consists of an all local group of architects, and (AHFC) for the $35M redevelopment of Loussac contractors including kpb architects, olberding white Manor. Through a competitive process, AHFC has architects, The Petersen Group, F-E Contracting and awarded CIHA $26.1 million in the form of $22.8 GMC Contracting. Many months of planning and million in Low Income Housing Tax Credits (LIHTC) collaboration were involved to create a final proposal, and $3.3 million in AHFC corporate receipts. CIHA which maximizes the development site, creating a unique has pledged funding of its own, in addition to loan Alaskan neighborhood with a beautiful streetscape financing by AHFC. Wells Fargo has joined the and interesting architectural detailing. The finished venture as the tax credit investor. The development site development will offer two-, three- and four- bedroom is located in midtown Anchorage between A and C apartments in a range of building sizes and styles from Streets, off of 20th Avenue. This redevelopment effort duplexes to six-plexes. Each apartment will have its own represents a significant public/private partnership, private entry and garage, which allows for residents to which will result in a considerable increase in affordable have a real sense of ownership of their new home. housing in the community. “We are excited at the prospect of bringing much Loussac Manor will be redeveloped by Cook Inlet needed affordable and workforce housing inventory to Housing as “Loussac Place…Where Families Grow” Anchorage in partnership with AHFC,” says Carol Gore, and will consist of 120 units of mixed-income housing, CIHA President/CEO. “This location is ideal for the which will replace the 62 units of housing formerly downtown and midtown workforce and their families, known as Loussac Manor. This will be the first mixed- with easy access to public transportation, bike trails and income workforce housing in Alaska. A cornerstone a beautiful park across the street, Loussac Place will truly of the new development will be the new ZJ Loussac be a place for families to grow and thrive.” Community Building, which will house CampFire USA afterschool activities and serve as a gathering Note: Construction on “Loussac Place…Where Families place for the community, offering access to a multitude Grow” began in June of 2011 with a targeted completion of partner service agencies, budgeting/self sufficiency date of May 2013. A phased building development schedule classes and other activities. will allow for lease-ups beginning in June of 2012 as the first group of buildings is completed.

4 EX-OFFICIO MEMBERS

Appointed by the Board Mapping Cooperation Bill Evans Chair, Anchorage Chamber of Commerce DAT/EM Systems International is a prime example of an Anchorage high-tech Brian Nerland industry company that has successfully developed a product with a worldwide District President, KeyBank Alaska customer base. Since 1987, Anchorage based DAT/EM Systems has been Carol Comeau Superintendent, developing cutting edge software and hardware for the branch of mapping known Anchorage School District as photogrammetry which is used by engineers to create extremely accurate maps Chris Anderson of all sizes and scales using state-of-art 3D stereo visualization hardware. Deputy Director – Credit & Business Development, AIDEA DAT/EM’s products are used in a variety of ways in over 70 countries around Chris Schutte Anchorage Dowtown Partnership the world. Their resume includes everything from the redesign of the Elmore Dr. Don Bantz Road project in Anchorage, to building 3D maps of villages in Ethiopia and even President, Alaska Pacific University the creation of 3D databases for Google Maps found in your iPhone by Indian Elisha “Bear” Baker companies. It’s also in the classroom at many universities including the Geomatics Dean, College of Business and Department at the University of Alaska, Anchorage allowing new graduates to Public Policy, UAA enter into the workforce with a current, technical and employable skill-set. John Parrott Airport Manager, Ted Stevens Anchorage International Airport

Global companies aren’t the only ones reaping the benefits of DAT/EM’s products, Julie Saupe however. Local companies here in Alaska are using DAT/EM products to provide President & CEO, Anchorage Convention & Visitor’s Bureau a desperately needed upgrade to Alaska’s geographic data. The base topographic Larry Cash maps used in Alaska today were created over 50 years ago by the U.S. Geological President, RIM Architects Survey and are unsuited to today’s modern methods of analysis and display. The Mary K. Hughes last statewide imagery collection in Alaska was performed by NASA using high Past Board Chair, AEDC altitude reconnaissance aircraft from 1978-1986 under a multi-agency program Susie Gorski led by the USGS. Executive Director, Chugiak-Eagle River Chamber of Commerce The Alaska division of AeroMetric – of which DAT/EM is a division, is using Tennys Owens President, Artique, Ltd. DAT/EM software to bring Alaska’s geographic data into the modern age through Wanetta Ayers the comprehensive Statewide Digital Mapping Program for the Department of Director, Office of Natural Resources. This will be the first Alaska statewide mapping program in Economic Development, DCCED more than 25 years. For the first time in Alaska’s history, there will be accurate William Dann mapping data tools available for use in public safety improvements, environmental CEO, Professional Growth Systems analysis and natural resource management on a statewide level.

LEGISLATORS

Craig Johnson Representative District 28, Alaska State Legislature

Lindsey Holmes Representative-District 26, Alaska State Legislature

Johnny Ellis Senator-District L, Alaska State Legislature

Lesil McGuire Senator-District N, Alaska State Legislature

MUNICIPALITY

Mayor Dan Sullivan Municipality of Anchorage

Chris Birch Assembly Member, Municipality of Anchorage

Ernie Hall Assembly Member, Municipality of Anchorage

5 AEDC 2011 Board of Directors Voting Members

Anand Vadapalli Cargo Transfer: President & CEO, Alaska Communications Bill O’Leary Vice President of Finance & CFO, Alaska Railroad Corporation Open for Collaboration Bob Heinrich Vice President of Finance, ConocoPhillips Bruce Bustamante Vice President of Community and Public Affairs, Princess Tours Bruce Lamoureux Vice President & Chief Operating Officer, Providence Alaska Medical Center Chris Brown, Chair Director of Business Planning, AT & T Alaska Chris Stephens President, Bond, Stephens & Johnson, Inc. Claire Fitzpatrick Vice President & CFO, BP Exploration Alaska, Inc. Dale Pittman Alaska Production Manager, ExxonMobil Corporation David Hamilton The Alaska International Airport System • Carriers invited to apply for new routes Executive Director Business & Commercial Services, - the Ted Stevens Anchorage International to the US provided new points to be Alaska USA Federal Credit Union Airport (ANC) and the Fairbanks served will be served via Alaska. Dennis Mitchell Vice President - Energy, International Airport (FAI) - has the most Lynden International liberalized air cargo transfer rights in the With all of the unique opportunities ANC Ed Herndon CEO, Chugach Alaska Corporation United States. No other airport system in offers, one would expect a large number George Vakalis the US allows air carriers the cargo transfer of carriers to take advantage of these Board Member, AWWU incentives, yet surprisingly most don’t. Greg Kessler opportunities that ANC and FAI offer; Director of the Alaska Commercial Group, all made possible thanks to Department There are a variety of reasons for this, but Totem Ocean Trailer Express two really stand out. First, there is a lack Greg Pearce, Vice Chair of Transportation (DOT) Exemption VP General Manager, Business Services, of cargo transfer facilities at ANC. Lynxs GCI Authority and the Stevens Amendment. Jack Sheppard Group LLC’s Alaska CargoPort facility President & Creative Director, Stevens Amendment is the only privately owned multitenant Walsh|Sheppard facility designed specifically for cargo Jim Posey This amendment to the Aviation General Manager, ML&P transfer, with three current tenants: DHL Investment and Revitalization Vision Joseph Everhart, Secretary/Treasurer Express (USA) Inc., Polar Air Cargo Sr. VP of Alaska Commercial Banking, Act allows non-US airlines to carry Wells Fargo Bank N.A. Worldwide, and Atlas Air, Inc. Lon Wilson, Immediate Past Chair international cargo between US points as President, part of an interline itinerary if and only if The Wilson Agency, LLC The second reason is due to a newly Lynn Henderson the interline connection occurs in Alaska. accepted interpretation of the laws Director of Sales, Alaska Market, • Conditions: Premera Blue Cross Blue Shield of Alaska involved. The Stevens Amendment Mark Liland (a) Non-US carrier must be Director of Sales, Northern Air Cargo states that “Cargo being carried on the authorized to serve Alaska. Michael Martin domestic leg of an interline itinerary must Vice President, (b) Cargo being carried on the First National Bank Alaska be carried on behalf of a US airline. “It domestic leg of an interline Michael Prozeralik was only last year at the 2010 Air Cargo Managing Principal, President, itinerary must be carried on kpb architects Summit that industry participants realized behalf of a US airline (code sharing, Mike Devlin the law does not preclude US air freight Founder, Evergreen Films, Inc. blocked space, etc.). Raquel Edelen forwarders from managing the cargo Vice President of Operations, on behalf of a US airline. The option of Hotel Captain Cook DOT Exemption Authority Scott Hansen working with a freight forwarder instead of Business Manager, Carpenters Local 1281 On Aug 19, 2010 DOT reinstated a domestic carrier opens up a host of new Sophie Minich exemption authority making it opportunities for air cargo at ANC. Chief Operating Officer, CIRI advantageous to use Alaska as a cargo hub. Stewart Osgood President, DOWL HKM • Flexible on-line transfers This type of realization is one of the Suzanne Cherot • Change-of-gauge (including “starburst”) reasons for the success of the Air Shareholder & Attorney, Birch, Horton, Bittner & Cherot • Commingling US international cargo Cargo Summits. This year’s Summit is Terry Bailey with non-US scheduled for August 29-31 at the Vice President-Upstream Market Sector, CH2M HILL • US and non-US carriers can transfer Hotel Captain Cook. For more Timothy Vig cargo freely with each other where origin information contact Trudy Wassel, President, USKH Vacant and destination are outside the US Airport Division Operations Manager Continental Airlines • Any non-US carrier serving the US at [email protected]. Vacant FedEx allowed to serve Alaska 6 AEDC DIAMOND INVESTORS Thank You Anchorage First Participants Anchorage First is a citywide campaign to encourage consumers to spend locally during March, April and May. The campaign encourages consumer households to spend $25 a month locally to help support our friends and neighbors as well as ourselves. Thank you to our Participating Businesses ABC Motorhome nkgIMAGEproductions Humpy’s Alaska Integrated Media Over The Rainbow Toys La Cabana Alaska Rewards People Mover McGinley’s Irish Pub Anchorage Press PropaganskaAK Midnight Sun Café Apokrisis Sevigny Studio Muse Club Paris Spenard Roadhouse Orso Copper Whale Inn Snow City Café Rumrunner’s Cyrano’s Off Center Playhouse Spire Commercial Sacks Café & Restaurant Dos Manos Gallery Real Estate Simon & Seafort’s EP Roofing, Inc. TecPro Solutions South Full Curl Archery The Kobuk Sub Zero Kathy Day Public Relations Thrifty Rent A Car Sullivan’s (KD/PR) Virtual Dianne’s Restaurant The Marx Brothers Made in Alaska Fletcher’s The Snow Goose Restaurant Metro Cooks Ginger The Whale’s Tail Mixx Grill Glacier Brewhouse Urban Greens

And our Supporting Agencies & Partner Organizations Anchorage Downtown Anchorage Convention Bryson Andres Partnership, Ltd. and Visitors Bureau Media Productions Associates Anchorage Chamber of Walsh|Sheppard AIM Broadcasting Commerce GCI Anchorage Press Chugiak Eagle River Chamber of Commerce

Thank You to Our Generous Sponsors Of the 2011 Outlook Luncheon

KEYNOTE SPEAKER SPONSORS CONTRIBUTING SPONSORS SPONSOR 3M CH2M Hill Alaska Communications Mikunda, Cottrell & Co., Inc. Alaska Regional Council The Tatitlek Corporation of Carpenters The Alaska Club Alaska Regional Hospital PRIMARY SPONSORS Alaska USA Federal BOOK SPONSOR Credit Union BiNW Birch Horton Bittner & GIFT BAG SPONSOR Cherot Roger Hickel Contracting Chugach Electric Association MEDIA SPONSORS Providence Alaska Anchorage Media Group KEYNOTE SPEAKER HOTEL Medical Center Anchorage Daily News ACCOMMODATIONS The Wilson Agency Clear Channel Radio SPONSOR Totem Ocean Trailer KTUU Channel 2 Hotel Captain Cook Express, Inc. YourAlaskaLink.com 7 INVESTORS PRSRT STD US Postage PAID WELCOME Anchorage, AK Permit #882 To our

new investorS:

Alaska Center for the Performing Arts 510 L Street, Suite 603 Anchorage Fracture & Anchorage, AK 99501 Orthopedic Clinic (907) 258-3700 Anchorage Public Library www.AEDCweb.com

Coastal Television

NCP Design/Build Ltd.

PCL Construction Services

Solstice Advertising

South Restaurant

The Foraker Group

Notable Numbers AEDC STAFF THANK YOU Alaska’s Personal Income Bill Popp President & CEO TO OUR

Renewing investors: Total amount earned Alaska’s per capita income rank Jon Bittner out of the 50 states in 2010: Business & Economic by all men, women and Development ML&P children in Alaska in 2010: Director Thompson & Co. 8th ($44,174) Public Relations $1.2 billion Amy Culhane Business & Economic Alaska Distillery Alaska’s per capita Development Assistant Director Kiewit Construction Percentage of workers in income rank out of the Company Alaska that live elsewhere 50 states in 2007: Dana Applebee ConocoPhillips Alaska in 2010: Development Coordinator ExxonMobil 15th KeyBank of Alaska 19.1% Meaghan Gould CH2M Hill State with the highest per Administrative Assistant UAA-SBDC Amount subtracted from capita income in 2010: total personal income Carlile Transportation Systems, Inc. figures due to non- Connecticut residency in 2010: Specialty Products, Inc. ($56,001) Dowland-Bach Corporation $1.6 billion Penco AK Percent of Alaska’s per CRW Engineering Group Number of states with capita personal income Porcaro a larger non-resident growth in 2010: Communications, Inc. personal income Chugiak Eagle River workforce adjustment: 4.8% Chamber of Commerce Three AEDC is a private nonprofit Millrock Exploration Corp. corporation (IRS code 501(c)(6)), Only year between 2000 operating since 1987. It exists to Alaska AFL-CIO encourage growth and diversity in and 2010 that Alaska’s total the Anchorage economy, promote US Average per capita a favorable business climate and improve the standard of living of income in 2010: personal income dropped: Anchorage residents. Funding sources for the corporation are municipal and state grants, con- tracts, and private contributions. $40,584 2009 For permission to reproduce any part of this newsletter, please call (907) 258-3700. Source: Alaska Department of Labor and Workforce Development 8