Business Intelligence
NEW GROUP TAKES CONTROL OF SKAGWAY WATERFRONT, RAILROAD
An Alaska-based port and vessel operations group, Survey Point Holdings of Ketchikan, will purchase the Canadian-owned White Pass and Yukon Route, a historic railroad in Skagway, as well as related docks and shoreside uplands in a $290 million deal that will close July 31. Three other companies, Rail Management Services, Progeny 3 Inc. and Miami-based Carnival Corp. through its Alaska subsidiary Holland America, will be partners in the deal, with Carnival having a minority stake. The assets are now owned by TWC Enter- prises, a major owner of golf clubs in Quebec, Ontario and Florida. Survey Point Holdings is a major tour- ism and marine support operator, owner of the Cruise Line Agency of Alaska, which supports large cruise ships coming to the state, as well as Temsco Helicopters and other operations. Survey Point will manage
the day-to-day operations of the railroad and other Skagway operations. Holland America is a major Alaska cruise ship operator and is positioned to provide a steady stream of summer tourists to the railroad, which is a popular attraction.
This development has big implications for the future growth of Alaska cruise tourism and infrastructure to support it for Skagway, where the railroad is a key attraction. It brings deep pockets and long-term commit- ments of major players in the regional industry to own the Skagway facilities and railroad. TWC, in contrast, has its core business elsewhere, and while Skagway was an important source of cash it was not part of the core business. Infrastructure improvements are needed at Skagway to handle ultra-large cruise vessels, and the new group will be able to accommodate that.
It’s also good for Skagway because it sort of locks in Holland America to use the community as a destina- tion, although the company seems committed enough already. The only downside is how Holland America’s competitors, such as Disney will view this. There could be a concern about being locked out of the most preferable docking times, and such.
ANCHORAGE’S COMMUNITY DEVELOPMENT AUTHORITY PURCHASES DOWNTOWN LIO: Anchorage’s assembly approved a plan for the Anchorage Community Development Authority will pur- chase the former Legislative Information Of ce building on Fourth Avenue in downtown Anchorage. The city-owned authority, which also owns Anchorage’s downtown parking garages, is discussing a plan for the Anchorage Police Dept. to move from crowded facilities on Tudor Road to the downtown location. A Florida-based bank that owned the building agreed to a $14 million sale price to the parking authority. The Legislature signed a contract with local developers to build the new building but then canceled the contract when a state court ruled it illegal. That left the developers stuck with the property, and ultimately the bank.
STATE SCALES BACK LONG-TERM POPULATION GROWTH ESTIMATES: State demographers are scaling down their long-term estimates of population growth. The latest projection is 838,000 by 2045, about 100,000 higher than the 737,000-current estimate for the population. That’s down from estimated growth in previous years (the forecast is done every two years). In 2016 the estimate was 900,000 by 2045. In 2014 it was 925,000 by 2042. In 2012 it was 915,000 by 2035.
PERSONAL DEBT STABLE, DESPITE RECESSION: Alaska personal debt has been stable despite three years of recession, state labor economists report. Mortgage debt is generally at although auto and student loan debt has risen, but in line with national trends. Household debt per capita was $57,850 in the fourth quarter, 2017. The department used data from the Federal Reserve Bank of New York in its report. Of interest, however, is that Alaskans have the highest per capita credit card debt in the nation, at $4,276, and have been highest in the nation since 2003. The gure hasn’t been growing, however. State economists say there’s no clear answer as to why Alaskans’ credit card debt is higher other than higher living costs and, possibly, the popular Alaska Airlines visa program which gives airlines miles for charges.
MARIJUANA TAX INCOME OVER $1 MILLION FOR SECOND MONTH: For the second month in a row state marijuana tax collection exceeded $1 million in April, state revenue of cials reported. This brings total collections to $8.6 million for the scal year so far. The state has collected $10.4 million in excise taxes since legal marijuana sales began in October 2016.
ANCHORAGE MAY HIKE ITS CITY MARIJUANA TAX: Anchorage may increase its marijuana sales tax. The current 5 percent tax brings in about $3.5 million yearly. An proposal has been made to hike it to 7 percent, which would generate another $1.4 million per year. A ordinance increasing the tax is before Anchorage’s assembly.
KENAI CONSIDERS A NEW 12 PERCENT “BED” TAX: The Kenai Peninsula Borough may propose a new 12 percent hotel “bed” tax to voters in the October municipal election. Revenues would be shared 50- 50 with communities in the borough, who would also be free to impose their own bed taxes. Estimates are that the tax would raise $2 million to $3 million per year. The borough faces a $4 million budget gap.
SITNASUAK SHAREHOLDERS TAKE AIM AT CORPORATION: Sitnasuak Corp., Nome’s village corpo- ration, has come under re from shareholders for not holding an annual meeting in 2017. Terms have expired for four of the corporation’s directors and four more directors will see their terms expire in 2018. State law requires corporations to hold annual meetings, but a more serious problem is that the corporation may have dif culty operating with a partial board.
DIRECT CHINA-ALASKA AIR SERVICE MAY MOVE FORWARD: One of several things that came out of Gov. Bill Walker’s recent trade trip to China was progress on direct China-Alaska air service. Talks are focused on a 6 1⁄2-hour Harbin-Anchorage ight. Harbin is in China’s northern Heilongjiang province, its farthest north, where there are many climate similarities to Alaska. The ights would open the door to signif- icant new tourism. Explore Fairbanks, the Interior city’s visitor promotion group, was along for the trade trip and signed an agreement with East West Marketing Corp. in Beijing to represent Alaska tour operators.
ANOTHER SIGN OF RECESSION; ANCHORAGE BUILDING ACTIVITY DOWN: Anchorage building activity is down 19.8 percent for the rst four months of 2018, real estate analyst Connie Yoshimura wrote in the Alaska Journal of Commerce. Most of the decline, which is in value of building permits, is in commercial building. Residential permit activity is stable and even up a bit. Elevator permit applications to the munici- pality, another measure for larger-building construction, are down about 50 percent from the rst four months of 2017.
ALASKA PERMANENT FUND ROCKS! 12.14 PERCENT 12-MONTH RETURN: Alaska’s Permanent Fund netted a 12.14 percent return for the 12-month period ending March 30, the Fund’s trustees were told at their most recent quarterly meeting. That outperformed benchmark indexes by 1.5 percent. Over the previous ve years the Fund has earned an average annual return of 8.35 percent. The overall size of the Fund was $64.6 billion on March 30, up $4.8 billion from the start of the FY 2018 scal year last July 1. If the long- term 8 percent return can be sustained it would comfortably support the Legislature’s 5 percent annual draw to support the budget and Permanent Fund dividends (see item, page 1).