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In the face of a tumultuous U.S. economy overall, the largest city in the central Kenai Peninsula was reporting finances in the black at the beginning of 2009.

"Alaska is still a boom and bust place and we haven't really felt the full impact of the (economic) downturn," said Kenai City Manager Rick Koch. "I'm concerned."

Historically, Koch said such downturns have been relatively short in Alaska, and the question on people's minds now is how long will it last.

Kenai's top administrator is keeping a close eye on the Consumer Price Index in Anchorage, which he said went up 4 1/2 percent in the last six months.

"No federal or state agency puts out a cost-of-living (index) for Kenai or the Kenai Peninsula, but my feeling is it's not exactly the same in Kenai, but it's in the ballpark," Koch said.

Contributing to Kenai's positive numbers during 2008 was increased sales tax revenue due to the opening of Lowe's Home Improvement Warehouse late in the year.

Koch also looks forward to Wal-Mart opening its new superstore in Kenai, possibly as early as Christmas this year.

"Those decisions for the corporations to move forward were made before the economic downturn," Koch said. "Wal-Mart appears to be the least affected (by the downturn)."

Other commercial growth that occurred in Kenai during 2008 included the opening of Aspen Extended Stay Suites and the renovation of the Kings Inn Hotel and the 406 Sportsman's Lodge on the Kenai Spur Highway.

Koch said the city has seen a steady increase in commercial activity on leased property at Kenai Municipal Airport and that he fields calls often on the availability of other property for commercial development.

When asked about some empty commercial buildings on Willow Street, one of Kenai's main business thoroughfares, Koch said the professional building next to the Kambe Theater "has some real opportunities."

"The asking price needs to have room to allow for major remodeling," he said.

The abandoned Alaska Industrial Hardware store on Willow is owned by Anchorage Office Supply, according to Koch.

"They talked about opening it as an office supply store a year ago," he said.

With regard to the closed gas station at the corner of Willow and the Kenai Spur Highway, Koch said, "I haven't heard a peep."

He said a larger commercial development opportunity -- Millennium Square, -- continues to be a valuable property, which is land bordered by Bridge Access and Frontage roads.

"The key element is the stabilization of the bluff; that makes the property much more attractive for significant development," he said.

In terms of residential growth, while no new subdivisions were built in 2008, in-filling of existing subdivisions continued.

"The need is for multifamily units in Kenai, but currently it's hard to charge rents high enough to justify the construction costs," Koch said.

As a new national administration took office in Washington, a big question looming over Kenai civic leaders was the president's economic stimulus package: What will come to Kenai?

"The city council and I are real concerned about the economy," Koch said. "We're trying to stay as positive as we can to do what's best for our citizens.

"We have an obligation to create contracts and opportunities to support jobs and employment," he said. "Where the government can exist as a shock absorber, it's incumbent upon us to do so."

Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.