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Developers draw up Douglas Island designs; two proposed marine industrial projects would bring new commerce to Juneau.

Developers Draw Up Douglas Island Designs

Diversifying Juneau's economy and lessening the Southeast city's reliance on government have long been popular conversation pieces, both in the Capitol Building and on the street. But two industrial projects proposed for Douglas Island, separated from Juneau by Gastineau Channel, appear promising for turning that rhetoric into reality.

Juneau officials have asked the legislature for $7 million to expand the Douglas boat harbor, making room for a seafood industrial park and additional commercial moorage. The second project incorporates a deep-water port, bulk-fuel storage facility and industrial park for the back side of Douglas Island, on about 200 acres owned by Goldbelt Inc., Juneau's urban Native corporation. Goldbelt's proposed development also requires state funds, but the cost of a five-mile stretch of additional highway necessary to reach the port site hasn't been determined.

Backers say the two ports could stimulate Juneau's economy, as well as provide sorely needed services. The seafood facility for the Douglas harbor is designed to attract more fishermen to Joneau and lend support to those currently fishing out of the capital city.

"I definitely think there are enough fish in northern Southeast to support a couple of processors here in Juneau," says Geron Bruce, a gillnetter who sits on the local harbor board. "You're talking about a really good site here that's in a protected location."

Bruce also serves on an ad hoc committee that, on behalf of the Juneau assembly, is helping to oversee administration of a $340,000 grant from the 1990 legislature for the harbor project's design. The harbor is perfect for a seafood processor because of its proximity to Taku Inlet, Lynn Canal, Stephens Passage and Frederick Sound fishing grounds, Bruce says.

Two specialty processors, Alaska Seafood Co. and Taku Smokeries, processed 60,000 pounds of fish last year - a small fraction of the actual local catch. That means money out the window, says Dick Hand of Alaska Seafood Co., who also serves on the ad hoc committee.

For example, an estimated 5 million pounds of fish at an average of 75 cents per pound would bring $58,000 directly into the city as its share of the state raw fish tax. "You're not talking about throwing money away her at all; you're talking about making a wise investment in Juneau's future," Hand says of the Douglas harbor expansion.

Jim Kohler, director of the Juneau Economic Development Council, agrees. Juneau fishermen buy $6 million to $8 million a year in supplies and services, but only 25 percent of that is spent locally, Kohler figures.

The proposed harbor development also would expand commercial moorage by about 67 percent. The harbor age by about 67 percent. The harbor would be dredged and seven acres of uplands would be created, explains Murray Walsh, director of the municipal Community Development Department. Walsh's department works closely with the ad hoc committee overseeing the design grant.

Plans also include provisions for utilities and construction of a seawall and dock from the fill. A breakwater likely would be built to protect the area from the worst of the Gastineau Channel's elements. Walsh notes the expansion would accommodate services for fishermen, such as gear storage and ice.

The owner of the unused Douglas Cold Storage dock, located next to the proposed facility, sent a letter to the city-borough stating intentions of selling, Walsh says. He suggests the dock could be acquired and worked into the harbor expansion.

About $110,000 of the legislative grant has been spent or obligated so far in engineering and design, work contracted to Anchorage-based Peratrovich, Nottingham and Drage. If partial or full state funding isn't possible for construction, a bond sale may be investigated, Walsh says.

Some supporters of the harbor project are working behind the scenes to lure a processor to town. Joe Poor, director of the Juneau Chamber of Commerce, received six responses to 100 inquiry letters he sent to onshore processors in Alaska and Washington. The economic development council's Kohler also reports he is working with an interested processor.

Alaska Seafood Co.'s Hand says he's considering expanding his operations to a new site on Douglas Island. Managers of several other processors, including Silver Lining Seafoods of Ketchikan, say they're weighing investment in facilities at the proposed port. Walsh says an analysis of the fish business regionwide would help gain support for the project and point out the need for a processor.

The grant money comes from the $238 million Railbelt Energy Fund, an old savings account for South-central Alaska power projects. The legislature last year divided up about half of the fund for projects statewide.

Among members of the Juneau assembly, which accepted the money last October, there was disagreement over whether it should be spent solely on Douglas. Downtown and Auke Bay, north of Juneau, were discussed as alternative sites.

One critic of the Douglas harbor project is Sandro Lane of Juneau's Taku Smokeries. Although he supports development of new facilities to serve the fishing industry, he adds, "I'm not convinced that Douglas is the place to do it for several reasons. I think they're dreaming if they think that by doing such a project, at such a large scale, it's automatically going to attract a processor."

Gillnetter and hand-troller Russell Bartoo says a Douglas processor would provide commercial fishermen some independence, rather than having no option but to sell fish outside of town. "The bottom line is what we have presently is not sufficient to allow the commercial fishermen to be independent," says Bartoo. "I see a need for improving and building up the relationship between Juneau and the fishermen." He notes Juneau lack facilities for fishermen, including a reliable ice machine, moorage, and dock space.

Bartoo recalls that when he started fishing more than 20 years ago, the relationship between municipal officials and fishermen was strained. "It's been a long, hard road to get from that point to where we are today, with the acceptance of the commercial fleet and recognition of the commercial fleet being of benefit to Juneau," he says.

In 1988, the city-borough and University of Alaska Southeast agreed on a $500,000, 33-year lease for three acres and a dock between Aurora and Harris harbors, near downtown Juneau. The assembly spent $1.1 million rebuilding the dock and buying cranes for it. Some people questioned the deal, saying the site lacked developable uplands.

Capital Seafoods in Juneau used the area for transferring fish to its processing facilities nearby, and the company also ran an ice machine. But the business closed after the 1989 season due to an owner's illness. Since then, the municipality has tried operating the ice machine itself, but expenses have caused many interruptions of service.

With Larson's Marine, a welding and boat repair business, setting up shop, there is some activity on the dock this spring. Commercial fishermen also use the dock for loading and unloading equipment and supplies.

Harbor proponents cite a need for a processor to support salmon enhancement efforts from Douglas Island Pink and Chum Inc., a non-profit business that runs several local hatcheries. A good portion of last year's chum, or dog salmon, catch in Taku Inlet was due to DIPAC, says Don Ingledue of the Alaska Department of Fish and Game.

DIPAC is expecting a return of 300,000 chum, 360,000 pink, almost 27,000 coho and 300 king this year, says Ladd Macaulay, DIPAC director. DIPAC would like to sell its cost-recovery fish to a local processor if prices were competitive, Macaulay says.

Goldbelt's Plan. On the back side of Douglas Island, between landmarks called Middle and Inner points and five miles beyond the end of the existing highway, is the site of Goldbelt's proposed port and tank farm. Engineering work is incomplete, but preliminary figures put facility construction at about $6 million.

Goldbelt is the largest private landowner in the Juneau city-borough, with 1,400 acres between Outer Point and Point Hilda on Douglas Island, in addition to 2,800 acres elsewhere in the city-borough.

Joseph Wilson, president of the Native corporation, feels the proposed site is strategically located to serve the region's growing mining industry. The corporation is exploring the possibility of a free trade zone for the port that would help to attract Canadian mining companies.

"Juneau could become a major transshipment center for the rest of northern Southeast," says Wilson. "This port facility actually will be pretty equivalent to Anchorage. It will probably be the largest one in Southeast."

Goldbelt has hired consultants to help with the development's engineering, permitting, and marketing, and Wilson says the corporation is informally talking with companies who may be interested.

Lease payments would provide a source of long-term revenue for the Native corporation, which has 2,700 shareholders. Presently, Goldbelt's primary income is from timber operations at Hobart Bay in Southeast Alaska. But most of the trees have been cut, and the corporation needs to develop other assets, Wilson says.

The project has the unanimous backing of the Juneau chamber. "The Juneau chamber has been in favor of an industrial park in North Douglas for a number of years, but nothing seemed to be forthcoming," says Poor. "When Goldbelt announced it had this property in West Douglas and we looked at the plans, it appeared to be an absolutely beautiful, well-thought out, well-laid out industrial park."

Bruce Botelho, mayor of Juneau, says a seafood industrial park is needed on Douglas Island to help build the city's commercial fishing fleet. He adds, "Both projects are obviously efforts to diversify Juneau's economy. However, the Goldbelt project sort of complicates matters, as there are those who say their proposal is more strategically located for a processor."

He notes that the city assembly must ensure Juneau doesn't duplicate efforts when vying for state economic developments funds. "We, as a city, need to really sort out what makes the most sense," Botelho says.

Goldbelt's Wilson agrees that the two projects shouldn't compete with each other. "If Douglas had its processors and funding lined up, I don't think we would be in line to compete with them," Wilson says. "But if the opportunity is there (for seafood processing), I think we would consider it."

The management consulting firm of Anderson and Associates Inc. is under contract as project coordinator. "If it makes money, we'll probably do it. This is private property. It's waterfront, it has waterfront potential, and we intend to maximize that," Sheal Anderson says. His consulting firm also is evaluating options for providing power and water at the site.

The municipality's Walsh notes that the Juneau "Comprehensive Plan," a long-term blueprint for the city, designates the deep-water port location a "new growth" area that could accommodate such development. To proceed with the project, Goldbelt must secure planning commission and assembly approval for the industrial park by submitting an areawide master plan.

Wilson says the corporation expects to have the master plan finished within the year. Construction could start in early 1993, if permitting goes smoothly, and be finished by the end of that year, he says.

Gathering support from municipal officials and lawmakers is essential in winning an appropriation for a highway extension, which is not currently in the state's budget, Wilson says. If state and federal money isn't available, Goldbelt will build a lower-grade public access road to the site.

The Alaska Department of Transportation and Public Facilities concluded an environmental impact statement for an extended road corridor in 1989. But that EIS will require a supplement before the highway extension can be built, according to Jon Scribner, DOT&PF regional director.

Data for the impact statement included cost estimates for a gravel road from Outer to Middle point - more than halfway to the proposed port - at $6.9 million and for a paved road the same distance at $8.3 million, says Scribner. Anderson feels these cost assessments are too high.

Goldbelt is trying to convince not only legislators that the project is worthy of investment, but also some Douglas residents. "I know there's going to be incredible opposition," says Patrick Conheady, a North Douglas resident. "There's just no way logically they can put something in like that without doing something about the road first." He notes the road already is in need of repair. "Personally, I don't object to development of West Douglas. I just want it done right," adds Conheady.

Regardless of obstacles, many people argue the timing is right for the Douglas harbor expansion and Goldbelt's proposal, in light of the Hickel administration's romance with capital improvement projects.

Rich Poor, a resident of Douglas Island who serves on both the ad hoc Douglas harbor committee and the Douglas advisory board to the assembly, says although the community has grown from about 400 people when he was growing up there to roughly 2,000 residents now, business has been slowly drifting out of Douglas. He explains the proposed marine developments are regarded locally as means of reviving the island's faltering commerce. Adds Poor, "It's really just the old, normal push to try to keep the vitality of your town alive."

PHOTO : The Douglas Island boat harbor, close to several area fishing grounds, is considered an ideal site for improvements aimed at attracting more fishing industry operations to Juneau
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Title Annotation:marine facilities update
Author:Ripley, Kate
Publication:Alaska Business Monthly
Date:Apr 1, 1991
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