Local leaders brainstorm on future economic development

Local business and government leaders discussed ways to expand the Kenai Peninsula and Alaska beyond relying primarily on resource extraction at a two-day forum at the Soldotna Public Library last weekend. 

Resource extraction economies, which depend primarily on industries that harvest non-renewable resources, have struggled in recent years with low prices on commodities including oil, coal and copper. The Kenai Peninsula and many other communities around Alaska have struggled amid the downturn in oil and natural gas prices and the corresponding job losses as oil and gas companies scale back operations. Realizing their dependence on a single commodity, many have been brainstorming on how to diversify the state’s economy to avoid the dramatic boom and bust cycle.

It’s something Don Albrect, the director of Utah State University’s Western Rural Development Center, has seen in many rural western communities. In the process of writing his book “Rethinking Rural: Global Community and Economic Development in the Small Town West,” he visited 13 states to conduct planning roundtables and discuss long-term concerns.

One of the biggest keys in developing the economies in rural places is addressing broad issues, such as drug abuse and lack of support for entrepreneurs. A basic one that many areas of the U.S. have dealt with in recent years has been internet infrastructure, he said.

At the invitation of the Soldotna Rotary Club, he did the same on Friday and Saturday at the Soldotna Public Library. The crowd, packed with local government officials, business leaders and nonprofit directors, talked about ways to redirect the Kenai Peninsula’s economy to be more stable even when one sector trends downward.

Much of the conversation focused on tourism, a long-lived industry on the Kenai that has in recent years grown dramatically. With tentacles in a variety of industries, from lodges and sportfishing guides to restaurants and airplane charters, taxable sales for primarily tourism business increased about 1.7 percent in 2016, reaching about $175 million.

It’s an industry that is likely to continue to grow, with investment from the Kenai Peninsula Borough in the Kenai Peninsula Tourism Marketing Council and more people traveling to Alaska every year.

At the forum Friday, most of the attendees seemed to be aware of that, pitching ideas for a new brand for the Kenai Peninsula back and forth. The one that got the most informal support was “The basecamp for your Alaskan adventure.”

Agriculture came up, too. The Kenai Peninsula has one of the highest density of U.S. Department of Agriculture-funded high tunnels per capita of anywhere in the United States, and much of the land in rural areas is still available for farming, thanks to the borough’s lack of specific zoning codes outside the cities. In recent years, the farming community has ramped up, with many peony farms opening and marketing Alaska flowers for weddings in the Lower 48 and other farmers banding together to start the Kenai Peninsula Food Hub, an online marketplace for customers to buy local produce.

Jason Floyd, the owner of Ammo Can Coffee in Soldotna, said he recently began a marketing business for Alaska peonies to loop small farmers together to reach the worldwide floral market. It’s a lot of effort, but he said they’ve already included 20 farms and reached their annual goal for stems available to the market.

Other industries could use a change in direction, too. Paul Dale, owner of Snug Harbor Seafoods, said he’d like to see better cooperation between the sportfishing and commercial fishing sectors in the future. Cook Inlet, and the Kenai Peninsula in particular, has been famous for its controversial fishing politics, known as the fish wars, between the commercial and sportfishing interests over allocation of salmon. With an average of about $29 million in commercial fisheries landings each year and millions more attributed to license and gear sales and guided fishing trips, the salmon fishing industry is a vital one to the region both in dollar value and in identity, Dale said.

“It would be of more significance … if those from the different sides of the allocation conversations could get over that and start working together,” he said. “… This is not low-hanging fruit, but this is a pair of businesses that are world class in what they have to offer.”

Tim Dillon, the executive director of the Kenai Peninsula Economic Development District, said working together itself could be a good way to attract investment in economic development.

“I’m in the process of working with a variety of different folks that are looking at the Kenai Peninsula and one of the things that keeps coming back is people don’t want to hear all the bickering and fighting and stuff, they want to hear that yeah, there are problems, but people are acting semi-intelligently and trying to figure things out and compromise, being able to work together,” he said. “It comes back to attitude.”

Hovering in the background of the conversation is the old reliance on boom and bust cycles that plague the state’s fiscal planning and public perceptions. Sen. Peter Micciche, R-Soldotna, who also attended the meeting Friday, brought this perception up, saying Alaskans have always been worried about sustainable economic growth, even as the Permanent Fund’s investment earnings bring in multiple billions each year. Developing the economy in other directions will require investment, both culturally and financially.

“The state has never been stable,” he said. “Even though we have an enormous amount of financial resources Alaskans don’t ever feel like they’re stable, and when you’re not stable, I don’t know that you care to invest, knowing that this is their state and they’re going to stay here and they’re going to invest in those things. … It is the number one problem in this state.”

Though most Alaskans live in urban areas, including half the population living in the Anchorage or Matanuska-Susitna Valley areas, much of the population is still spread in small groups across the vast rural tracts of the state. In recent years, more rural Alaskans, especially those from villages in the Interior and coastal villages, have been moving to Anchorage to pursue jobs under the perception there are few opportunities for jobs in the rural areas. Though it makes sense under current circumstances, Albrecht said there are reasons for people to continue to live in rural areas.

“Most of our energy comes from rural areas,” he said. “Someone has to grow the food. And many people just like to live there.”

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

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