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New businesses cater to Unalaska's unquenched appetites.

New Businesses Cater To Unalaska's Unquenched Appetites

Check the map, the part that always seems to get chopped off and stuck in a corner. Trace the twisted strand of islands west one-third of the way to the International Date Line and the Soviet Union. That tiny dot in the Aleutian Islands looks so remote, so removed from urban bustle and big business.

Look again.

The geographic speck that is Unalaska/Dutch Harbor is the nation's number one fishing port in terms of volume, bringing in 504 million pounds of fish last year. The Aleutian port is number two in the nation in terms of product value, at $107.4 million worth of raw fish in 1989. And it is home to a multibillion-dollar industry that combines hard, hands-on labor with some of the most sophisticated technology in the seafood processing world.

Since the Americanization of the bottomfishing industry in the 1980s, this island community has erupted. The past year has seen $200 million worth of local construction underway, most of it in the private sector. A permanent population of slightly more than 2,250 people is swollen by more than 30,000 transient workers passing through each year.

Shore-based fish processing plants ring the harbor, and floating factory trawlers belly up to the crowded docks for fuel and supplies. As the bottomfishing industry sweeps the North Pacific and Bering Sea, Unalaska and its port of Dutch Harbor have become its hub.

But as the seafood industry brings people and dollars to the community of Unalaska at Dutch Harbor, the need for other services increases. Housing, recreation, medical services, social services and small businesses are under pressure to fill the gaps created by an expanding population.

"I believe there's room for a lot of basic businesses a community should have that make everyday life better," says City Manager Herv Hensley. "I think we've grown enough to support a dentist and full-time medical service and many other businesses you find in most small communities."

Take a bakery, for example. Commercial fisherman Philip Westbrook and his sister, Lorraine Westbrook, opened Island Cafe and Bakery in October. "Philip felt the community needed a bakery here. He knows all the boats coming in, and he knew it would be a good business to supply them with fresh bread," Lorraine says.

Formerly, bread shipped in from Seattle or Anchorage cost customers $2.99 a loaf. Now, the Westbrooks sell their fresh loaves for $1.99, and offer bread, rolls, cakes and pastries to local stores, restaurants and the ship trade.

The Westbrooks filled in just one of the gaps existing in Unalaska's economy. In April and May, the Southwest Alaska Municipal Conference sponsored a survey of nine Southwestern communities, including Unalaska/Dutch Harbor. Respondents were asked to list the services they felt were most needed in their community.

Unalaska's number one item was a dry-cleaning service, reports Marideth Sandler, executive director of SWAMC. Others in the top service needs were household appliances and furniture, auto repair and supply, insurance, office supply and furniture, video repair and pet supplies. The list continues with more than 30 additional suggestions.

A few of those needs have been met since the survey was taken; others already existed, but were swamped by demands. And still others are wide open for entrepreneurs.

Sandlers says SWAMC is taking its survey information to the Anchorage Chamber of Commerce and the Anchorage Economic Development Corp. "to see how we can link up businesses in Anchorage and other sources of supply." SWAMC is willing to provide businesses with initial contacts, she says, "but it's up to the individuals to do a more detailed analysis of the needs."

New businesses in Unalaska know what those needs are. More important, they have a close-up view of the obstacles that block fulfillment of those needs.

Cramped Quarters. The number one shortage is space, retail space and living space. Buildings for stores, offices, warehouses and homes are at a premium on this volcano-spawned island, where Mother Nature neglected to provide much flat, buildable land. Alaska Commercial Co. pays $6 a square foot in its rented building, about three times the average amount in Anchorage, according to Steve Kikendall, branch manager. He'd like to expand the store, but is limited to working within the constraints of the existing building.

Alaska Commercial has been in Unalaska almost continually since 1868, so it got a foot in the door early. Many newcomers don't have that advantage.

Ounalashka Corp., the local Native village corporation and owner of most developable land on the island, cites the high cost of installing utilities as its biggest stumbling block in development. "It's a leaser's market," Hensley explains. "Until people come in and build more commercial space, prices aren't going to come down."

The crunch for retail space is mirrored in housing. For many firms,

company-built housing is the solution to keeping employees.

Seafood processors, the town's major employers, can offer bunkhouse living to workers, and apartments or houses to management staff. Westward Seafoods, the newest processor to come to town, is investing some $75 million in constructing a seafood plant set to open in January. The vast plant includes two dormitory buildings and one townhouse building to help house the 250-300 expected employees.

At the other end of the scale are companies like Napa Auto Parts, with its 10 employees. Owner Tony Stanley has three efficiency apartments for his staff. He says, "If somebody came to me tomorrow with four more apartments, I'd snap them up, because I need that many more people."

Construction and Rigging has about 100 people in housing provided by owners of the Westward Seafoods and Unisea seafood processing plants, where employees are completing marine facilities. The firm's work force in Unalaska is expected to more than double over the next few months.

Brad West, senior vice president of the Anchorage-based construction firm, says finding suitable accommodations has been a persistent problem. He notes, too, that the lack of recreational facilities - such as a bowling alley or a skating rink - detracts from the quality of life.

Construction and Rigging recently acquired three building lots to use for modular homes to house project management. "I think we bought the last available parcels," West adds.

Creating Continuity. Employee turnover is another problem. Many transient workers come to Unalaska hoping to make big money in fisheries. Between jobs, or while waiting for the right position to come along, they'll go to work for a small business, only to leave again.

Some employers respond by offering to partly subsidize housing or to provide an airplane ticket to Anchorage or Outside when vacation time rolls around. Larger companies can afford to hire contract employees Outside, fly them to the Aleutians, and fly them home again when the job or the fishing season is done.

But few have that option, Stanley notes. "For smaller businesses, that really shrinks our profit margin," he says. "At the same time, you've got to take care of your employees to keep them."

Shipping, and the vagaries of weather and scheduling that affect it, is another concern for business. Alaska Commercial ships dry goods and groceries from Seattle to avoid the 15 percent increase that comes by ordering from Anchorage, Kikendall says. But the cost savings is offset by a minimum two-week shipping time from Seattle.

At Island Cafe, Lorraine Westbrook finds herself forced to plan carefully. "You just can't call Darigold and have them deliver milk whenever you want it," she says.

Long-distance shipping has other problems. Sometimes what you get isn't quite what you ordered, or the journey has taken its toll in other ways. In January, Ann Hazen opened Unalaska's first frame shop, Framed by Annie. The volume of business has her backlogged on orders for three or four weeks. But her toughest problem is getting glass - unbroken glass.

"The first couple orders were pretty awful," she explains. "The glass was trucked to Anchorage and then flown here, and half of it was broken." She since has learned that glass travels better by boat, where it is handled less.

At the same time, those shipping hassles can prove a plus to businesses able to plan ahead. "One of the main reasons the Napa store got built was that it drives you crazy trying to ship in parts," says Stanley, who opened his business in February as a companion to his Aleutian Truck Rental. By keeping auto, marine and heavy equipment parts in stock, he solves his own parts problems and lures customers who once had to send to Anchorage or Seattle for their parts.

Jim Touza is hoping the same thinking will get his business off the ground. The manager of Norfish Marine Services opened his doors in June, selling spare parts for Toyo Suisan Kikai fish processing equipment. Toyo fish filleting machines, headers, roe separators and other equipment are used on many Japanese and American vessels and by some shore-based processors.

"In the past, the supply link has been unreliable," Touza says. "We'll have a direct link with the factory, and we have a Japanese technician coming who'll be able to repair the machines as well as sell parts."

Norfish hopes the cost of doing business in the Aleutians will still be competitive with traditional sources based in Japan. "The biggest obstacle will be to establish ourselves as a reliable alternative," Touza says. He adds that keeping a steady inventory of crucial parts is his first concern.

Keeping Up. As small businesses step in to fill the gaps in Unalaska's service economy, other gaps remain empty. A small, World War II-vintage community center, a softball field and school facilities such as gym and pool offer the only organized recreation activities. A new $8.25 million school expansion scheduled to open this fall will still leave some overflowing classrooms in the elementary grades.

A social worker, substance abuse counselor and mental health counselor are available, but each is responsible for covering other Aleutian communities as well. And perhaps the biggest concern is the clinic, Illiuliuk Family and Health Services. Two physician's assistants and three registered nurses struggle to see as many as 100 people a day during the busy fishing seasons of January through May. Efforts to expand the clinic were sidelined by lack of legislative funding this year, and the non-profit clinic's board is looking for alternatives.

But if the community is strained in some senses, most people seem to shoulder aside the inconveniences and keep on going. This is a town where people expect to work hard, and they do. "The larger boats may spend 24 hours here, and that's $75,000-$100,000 lost in fishing time," Stanley says. "They're keyed up, they want to be serviced and get back out."

The expeditors, equipment operators and storekeepers respond to that sense of urgency. Many businesses post Monday-through-Saturday hours, but work nights and Sundays if the call is there.

"People who are attracted to Unalaska/Dutch Harbor are driven people," Hazen adds "They want to get ahead." At the same time, Stanley says, they're willing to help out others in a tight spot, and the community's generosity is broad. At high school graduation ceremonies in May, local businesses donated more than $23,000 in scholarships to six students - half the graduating class - headed for college or vocational school.

It may be that generosity and spirit that keep people in Unalaska once the fishing boom draws them here. The local population has grown 67 percent over the past three years, according to Professional Growth Systems Inc. of Anchorage. Their study predicts the population spurt will taper off to 10-15 percent annually over the next two years, and then slow to 5 percent - but it will keep growing.

To most Unalaskans, those numbers mean nothing without assurance that fisheries resources will be managed wisely. In the early 1980s, the community suffered a dramatic economic dive when king crab stocks were wiped out. That fishery was the entire basis of the local economy. Today's hope is that the more diversified fisheries of halibut, pollock, cod, crab and other species will provide a more balanced economy, and will be better managed.

Mayor Paul Fuhs would like to see diversification of another sort, pushing Unalaska's role as a trans-shipment point between the United States and Europe via the Soviet Union. "We haven't begun to explore the potential for tourism, or for mariculture, or for geothermal power," he adds.

"We're at the point of deciding how to meet the needs we have, and deciding what kind of community we want for the future."

PHOTO : Sunrise in Dutch Harbor illuminates an American factory trawler.

PHOTO : The view from Haystack Hill shows a Russian Orthodox church and a mix of residential and commercial buildings.

PHOTO : Two high-tech catcher vessels, their seafood cargoes chilled in ice slush, transfer the fish via vacuum pumps to the Unisea complex.
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Author:Murkowski, Carol
Publication:Alaska Business Monthly
Date:Aug 1, 1990
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