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Home My WebLink AboutEconomic Development & Tourism Study for The City of Seldovia 1993Economic Development & Tourism Study Prepared For The City of Seldovia Funded by State of Alaska Department of Community & Regional Affairs by Belyea, Sorensen, Trottier & Associates and Utti & Associates March 1, 1993 Economic Development & Tourism Study Prepared For The City of Seldovia Funded by State of Alaska Department of Community & Regional Affairs by Belyea, Sorensen, Trottier & Associates and Utti & Associates March 1, 1993 Seldovia Economic Development/Tourism Study Table of Contents TABLE OF CONTENTS EXECUTIVE SUMMARY Page 1 Statement Of Understanding ............... 2. cece cece eee eee ee ... Page 1 Finding Number One: Seldovia's Population Base has Greatly Decreased in‘the Past Few Years! jdcassesasenuseeassemoseemarewaatemmateeanseensenas Page 2 Finding Number Two: The City's Economy was Very Dependent on the Cannehy’. cisccs censsemsconsseeatcensteumses ise sate EAs eo ROrRMaNsNass eeEDs Page 3 Finding Number Three: The City's Economy must become more Diversified to Protect against Sudden Future Shocks ..................... Page 4 Finding Number Four: The City's Economy has Numerous Positive Options for Growth ........... 06.0 cece cece center e een eee eee e ees Page 4 Finding Number Five: Fish Processing is Returning to Seldovia .............. Page 6 Finding Number Six: Mariculture Opportunities are in their Early Developmental Stages ........... 2... fcc cnn cece een eee Page 6 Finding Number Seven: The Tourism Industry is Blossoming in Seldovia ..... Page 7 Role of Tourism in Seldovia's Economy .................0 cece eee eee ee Page 7 Opportunities for Additional Tourism ............. 60.0. c cece cece eee eee Page 8 Finding Number Eight: Forest Products Opportunities are Limited ............ Page 9 Finding Number Nine: Arts and Crafts and Cottage Industry Development is Possible but will have Limited Impact on Seldovia's Economy .......... Page 9 Finding Number Ten: Mining Opportunities are Limited .................... Page 10 Chrome ..... 2... ccc nee nnn terete nent tent eee een ees Page 10 Rock & Quarry ReESOUICES ........... 0. n ene nen eee Page 11 Finding Number Eleven: Opportunities for Wilderness Education and Research Appear Favorable ............... 0... cece e cnn een eeeee Page 12 Wilderness Education ............ 0.0.0 c cece cence eee eee n eee Page 12 Marine Research ......... 2... n teen e nent eee eens Page 12 Finding Number Twelve: Senior Housing and Second Homes are Potential Markets 22.0.0... 0.0.0 c cece cece nett e teen eee n teen ete eenens Page 13 Second Homes ........... 0.26 cece cece enter e ete t eee nett eee eees Page 13 Senior Housing ........... 6.0.6 c cece cence nent nen een eens Page 13 Finding Number Thirteen: Manufacturing, Repair and Selected Services Have Chances of Success ........... 0... ccc ec ee c eee e eee e ence enes Page 14 Manufacturing & Repair ...... 2... n cece nee e nes Page 14 Other Services & Businesses ............. 0.0.0 e cece ccc neces Page 14 Seldovia Economic Development/Tourism Study Table of Contents Finding Number Fourteen : The City and the School District are Very important:to'the Local ECOMOMIY! 55 ciate erste ots late) oto¥e elainte ir eitie ernie) steele Tess Page 14 MHOLC IY) Meese ciate ctor arisms a amr te na SOT RW atem a heat me gece aie: Page 14 Employment. .200.-c ares csc curs swuee ects ncemacce <crciemasineme ntl Page 15 Recommendations ............... 6... e cece eee eee tenet e een e ene . Page 16 Recommendation Number One : Assist New Owners Where Possible ...... Page 16 Recommendation Number Two : Encourage Local Participation in Mariculture through Existing Organizations .........................0005 Page 16 Recommendation Number Three : Promote the Tourism Industry .......... Page 16 AJASKA| MAK Ct rosercraysrelaparssoyererepsioyarereporeerer jeer aE Eee Ra as semrenmseE. Page 17 Non-Alaskan Market .............0 0000s cece cece eee e ene n nen ee eens Page 17 Bothy: Markets gece yes eects seis eleueiere ssi enilieeaeer Page 17 Recommendation Number Four : Develop More Tourist Resources in SOIMOVIA ssieais cows sel seminar sin eee erence eee mnesubietewesfaaat FERTLEES Page 18 A. The need to develop a strategic Waterfront/Main Street Physical Improvement (Plans) 4eecaaceostsessceosec- cass eecenee teem cic eerier Page 18 B. History as a desirable theme ................. 0... c cece cece eee ences Page 18 | OF = [07-10 7- || Page 19 Seldovia Community/Meeting/Tourism Support Building ................... Page 19 Initial BUINGING) eccie. se ccmiccrmiscrsioees areata samssriacs oa ceem Ges Page 20 Potential Optional Spaces or Phase II Construction .................... Page 25 Recommendation Number Five : Expand the Base for Local Arts and Craits) ecg acciccaree ee clones eras sean Cease sted ee usc aase yet leiid ieee rors Page 25 Recommendation Number Six : The City should Continue to Develop the SmalliBoatiManbon <ete-ceacee sateen tees eeasee ss sewaseeareawesue ans Page 26 Recommendation Number Seven : The City could Promote the Manufacturing Base by Developing Projects such as a Small Boat Paulout Fecility: orci siete cccse cect reseyeyotere i crrioseivfevel ores sje mi clososererese lenders satel os isnt Page 26 Recommendation Number Eight : The City should evaluate Improved FORTY ACCESS oes ecs)oyci ei oj cae seins cvnseje 10070 «1 wleioloseun esosniei cv eseynces 0104s (45/4) 5,516 01 be ESTAS Page 27 Alternative Ferry System ............ 0.0 c cece cece ete eee ence en eens Page 28 CHAPTER ONE - INTRODUCTION Page 29 Statement of Understanding ............... 0... cece eee eee eee ee . Page 29 Population 2.00... ccc eee reer e tent n ene n ene enes . Page 30 Population Characteristics ©0020... 00... cece cece cece eet e teen eens Page 32 GONE | ojecese cisireraroselertomioeirciindslomisine dg ROSASRAAMTIMAOTE STE TEMeA ENS Page 32 QO! aetecnmerisiea ste ara lect a nelare OG ot aera eeTHU Ei oleae merce cileeee egies Page 32 Seldovia Economic Development/Tourism Study Table of Contents Race/Ethnicity ............ 0. cece nce eee eee eee Page 32 Household Characteristics ........... 0... cece eee cece eee eee eee Page 35 HOUSING oo oe ee cee eee eee Foes Hohe Sem OEE NE ete ie sain nae oats . Page 35 Employment ............ 0.0.0 cece eee e cece enn nent teen nee n ey . Page 38 Retail Sales .... 20.0.0... e tenet nent e eee . Page 40 Future Developments & Summary ..............0ece cece eee eee ee . Page 41 CHAPTER TWO - SURVEY RESULTS Page 57 Community Survey ..............0 cece cece e eee tenet ences . Page 57 Household Characteristics ............. 0... c eee eee eee e eens Page 57 ATTUdES o.oo ccc cence cremains eae Ms eERETARD SRT NSE ERE ae 8 Page 58 Merchants Survey ............0. 00. cc cece cece eee eee e teen en enes . Page 59 Consumer Survey Responses ..................0 0c cece eee eee ees . Page 60 Merchants Survey Responses ................0. 00: c eee cece eee es . Page 69 CHAPTER THREE - COMMUNITY RESOURCES Page 77 Location & ACCESS ..... cece cece cette ene n ete e eens . Page 77 Local Government ........... 00... c cece ccc e een e eee ene e eens . Page 77 Municipal Boundaries ................. 20 ccc eee e nents . Page 78 S10) . Page 79 General Information about Seldovia .....................e cee eee . Page 83 SELDOVIA AN ALASKA COMMUNITY PROFILE .......................55. Page 83 SELDOVIA INFORMATION FROM INDIAN HEALTH SERVICE ............ Page 88 VACANT AND UNDERUTILIZED PROPERTIES ....................2..0055 Page 91 Small Boat Harbor ............ 00. t eee eee e ee Page 93 Active Cook Inlet Commercial Vessels ...............0 00sec eee eee eee Page 93 Existing Seldovia Fleet: .......wiis.cccsrsenaasansssnsnsemnnssmansesonsewe Page 93 Status Bathymetry ........0. 0... cece ene tenet ence eens Page 93 Boat Harbor Constraints (Existing water depths, typical/potential vessels & tidal impacts) .......... 00... e cece cnn e en eee Page 93 Conclusions and recommendations: ................. 00 cece eee eee eee Page 93 CHAPTER FOUR - TOURISM Page 104 Tourism on the Kenai Peninsula ..................0. cece cece eee eee Page 104 Tourism in Seldovia .......... 0.0.0 c ccc cece cece eee een e eens Page 107 Seldovia Economic Development/Tourism Study Table of Contents Race/Ethnicity 22.0.2... 0... cece ccc cece ncn n ence ene en een eenees Page 32 Household’ Characteristics: 2-2 --jcca 06 cence temaeeeint eemseeos tees = Page 35 HOUSING .... 0... cee ccc cence cece een e eee teen teen eens . Page 35 Employment ............ 0.00. c cece cece cece eee n cece e ence eneeaes . Page 38 Retail Sales 2.0.0.0... 0c ccc ccc c ene eet e nee e tenn ennenes . Page 40 Future Developments & Summary ................. 0c eee eee eee eee . Page 41 CHAPTER TWO - SURVEY RESULTS Page 57 Community Survey ............. 0.020 e cece e cece eee eee eee enes . Page 57 Household Characteristics .......... 2... c ccc e cece cece een nent eens Page 57 Attitudes) aascsantcoss teaaseenatemarsmenaiees: iat teat fat igaemes soetesare Page 58 Merchants Survey .............. 00. c cece cece eee c en eee n teen een eees . Page 59 Consumer Survey Responses ...................0e cece cece eee ees . Page 60 Merchants Survey Responses ..............0..0e eee e cece eee ee ees . Page 69 CHAPTER THREE - COMMUNITY RESOURCES Page 77 Location & ACCESS... 6... ccc ccc cece cece nent ene eeenenes . Page 77 Local Government ............. 0... c cece cece cece een nen tenes . Page 77 Municipal Boundaries ............. 2.0.00. cece cece cece een eens . Page 78 HiStonyaeee ne seerneckie ctor trier crertinciiee tren recta rein . Page 79 General Information about Seldovia ....................0e cece eee ee . Page 83 SELDOVIAN ALASKA COMMUNITY PROFILE .....................0.00055 Page 83 SELDOVIA INFORMATION FROM INDIAN HEALTH SERVICE ............ Page 88 VACANT AND UNDERUTILIZED PROPERTIES ......................2.52. Page 91 Small Boat, Hanbon sreaaeremarmmm arson smmroa si oasrelscsta crete) -toneietceslori-t:] ose Page 93 Active Cook Inlet Commercial Vessels ............... 0.00 cee e eee e eens Page 93 Existing Seldovia Fleet; csaisccessseenimms cessne ateess eeeorer ens swe ch Page 93 Status Bathymetry ...... 2.0.6.6 cence cence cence ene eens Page 93 Boat Harbor Constraints (Existing water depths, typical/potential vessels & tidal impacts) 2.0.00... 0... cece cece cece tee ence eee Page 93 Conclusions and recommendations: ................. 00sec eee e eee eee Page 93 CHAPTER FOUR - TOURISM Page 104 Tourism on the Kenai Peninsula ..................0.0 cece eee eens Page 104 Tourism in Seldovia .......... 60. cece cece cence een e eens Page 107 Seldovia Economic Development/Tourism Study Table of Contents Role of Tourism in Seldovia's Economy .................0.0000000e Page 110 Description of Tourist Facilities .................. 0. c eee eee eee Page 112 Seldovia-Tourism Marketing Philosophy ......................005+ Page 115 PEOPLE COME TO SELDOVIAFOR WHAT ISN'T HERE ................. Page 116 SELDOVIA TRAIL PROGRAM .............00. 00 cece cece ete eee te eee e es Page 117 Opportunities for Additional Tourism .................0 cece eee eee Page 118 Seldovia Tourism Strategy .......... 0... cece cence nee tenet e ees Page 118 Basic Kenai Peninsula Tourism Facts .................. 2.000 e eee eee Page 118 Resident Market: ......0:.sscsssisarssswanssannisssasanmiesesnesaes swans Page 119 Non-Resident Market ............. 00.00. c cece cece nent e ene e ee Page 119 Both Markets ............ 0.0.0 cece cece entree ene n eee e eee een ees Page 119 Other Specific Tourism Development Opportunities ............... Page 120 Bicycling: Mountain Biking. ............ 06.0. e eee cence eee ees Page 120 Ski ArEAS 0 ccc teen detente teen en en ene es Page 120 Fishing Chamers. 9. ic: sesicemnsersesemosseearsuens eonreeaaseeenrenas: Page 121 Day Tour Vessels .......... 00... ccc e nen n ene e ences Page 121 Air Charter Tours) ....4... ccc sseens comeisemsi omnes seme ownassmwacewas Page 121 MUSEUM .... 0... cence eed bbe tebe e ene e teenies Page 121 Art and Crafts 2.0.00... 0.0 e tenn e tenn ene nee Page 121 CHAPTER FIVE - FISH PROCESSING AND MARICULTURE Page 122 Fish Buyers ............. 0020 eee e eee eee e ees eee e cece eeeeeueees Page 122 Fish Processing ............ 0.00 cece cece eee e eee e teen eee eens Page 122 John Cabot Plant ............ 00. n ener e eee nee e nes Page 123 Seldovia Native Association ............. 0... Page 124 Opportunities for the Plant ............. 0... cece cece cee cee eee eee Page 124 Mariculture 2.0.0.2... 0... c cece c cece net ene e ene n ene enes Page 126 International Trends ........... 0.0.0 c cece cece cece eet een ence eee Page 126 Opportunities 20.0... cece cece een nent ene en ee eees Page 128 Impact on Seldovia .......... 0... ccc cece cece teen ete eeeeees Page 129 CHAPTER SIX - FOREST PRODUCT PROCESSING OPPORTUNITIES Page 122 Log Exports 2.0.0.0... 0c c cece cece cence eect e ence e teenie enes Page 132 Lumber Exports 0.0.0.0... 0.0. cece cece cece eee ene n een e teen eens Page 132 iv Seldovia Economic Development/Tourism Study Table of Contents CIP EXpOrts to. ec fc ere ee tcc jt snostas cach sano Page 134 Ownership Issues .............. 000.0 cece eect e eet e ee teen teen eens Page 134 Marketing ISSUCS ............0 6.0 e cece cence tee nee eee e eens Page 134 Log: Homes:=s23sscee tes ee se ie Page 136 CHAPTER SEVEN - COTTAGE INDUSTRY AND ARTS & CRAFTS Page 139 Description of Cottage Industry ................. cee cece eee eee ee Page 139 Marketing is the Key ............ 20.0 eee cc eee eee eee eee eee ees Page 139 Size and Seasonality of the Industry .............. 0... c cece cece eee eee eee Page 141 Berry Harvesting@ sess. 5 see erga ner etc ane soe Page 141 Recommendations ..............6.ce cee eect e eee eee eet eee ees Page 142 CHAPTER EIGHT - MINING INDUSTRY Page 143 Assessment of Chromium Resources .................0-00ee ee eee Page 143 RlistoriGal WhOMGS 6. scene cee ee ee eee eo ee Page 143 Present Mining Activities ............ 0... c cece cece eee ee eee tees Page 145 Competition: 53.56. se ee ee er Fone ne eeas ease render eect Page 145 IMpactiOn Seldovia no. cers e eee ee gee ee een eae: Page 145 Rock & Quarry RESOUICES ......... 6... eee eee Page 146 Assessment Of RESOUrCES 22... tte e eee setes se enecem is Page 146 Ownership Issues) 2: 25..3..: 00. senet saeassens ees seoasemaseors sue vereaassewes Page 147 Opportunities for Development of Resources Rock Exports .............. Page 147 IMpact OM SCIMOV IA ares. siceseceepcete eects tins rebar esses ei mess ws Page 147 CHAPTER NINE - MARINE/WILDERNESS EDUCATION AND RESEARCH Page 148 Existing Facilities [lille UE Td oe Page 148 Marine Research Center ............... 0.00 cc eee cece e teen e eens Page 149 Marine Education Center = sais seeecas eet eee ieee ees Page 149 Eeaming Center = oso. c < cece eects sae ice ente tte soeeete ess Page 150 Recommendations ........... 0... c ccc cece nee e eee ene eee Page 150 Seldovia Economic Development/Tourism Study CHAPTER TEN - THE POTENTIAL FOR DEVELOPING THE SENIOR CITIZEN MARKET Opportunities for Development .................. 00. e cece eee ee eee Constraints to Development ............ 00.0... ccc eee e ence eens CHAPTER ELEVEN - SECOND HOMES Recent Sales & Transfers ........... 0.0.00 ccc cece cece eee eens Construction Trends ............ 0... c cece cece cece cence eee e eens Seldovia Housing Stock ............ 20... ccc e cece cence eens Opportunities 2.0.0.0... ccc cece ence teen nes CHAPTER TWELVE - WATER TRANSPORTATION Alaska Marine Highway System ................0.0.e cece cece Alternative Ferry System ......... 0.00.0 cece ccc cece cece ene e teens CHAPTER THIRTEEN - IMPORTANCE OF LOCAL GOVERNMENT TO THE SELDOVIA ECONOMY City of Seldovia Provision of Services .....................0 cee eee City of Seldovia Revenues and Expenditures ...................... City of Seldovia Generation of Payroll .........................200. City of Seldovia Summary of Funding Requests ................... School District 2.0.2.0... ccc een e cence ences CHAPTER FOURTEEN - OTHER OPPORTUNITIES Other Opportunities ........... 0... cece nce e ee Manufacturing ............ 0... c cece cece eee e een e eee ees Repair ServiceS ......... 20... ccc cee ence eee nee e eens Transportation Services ............... 00. c cece eee eee eens RV Parks & Campsites .............. 0.0. c ccc cece cece eee eee eee Coin Operated Laundries ............. 2.0... c cece cece cece eee es Barber and Beauty Services ...............0 0... c ccc eee eee Tax Preparation and Related Services ....................0.00000. Computer & Data Processing Services .......................02005- Miscellaneous Recreational Facilities ............................ Table of Contents Page 151 Page 152 Page 152 Page 156 Page 156 Page 156 Page 156 Page 158 Page 161 Page 161 Page 162 Page 169 Page 169 Page 173 Page 176 Page 177 Page 178 Page 179 Page 179 Page 179 Page 181 Page 181 Page 181 Page 181 Page 181 Page 182 Page 182 Page 182 EXECUTIVE SUMMARY Seldovia Economic Development/Tourism Study Executive Summary EXECUTIVE SUMMARY STATEMENT OF UNDERSTANDING Seldovia is a small community of 316 full time (1990 Census) and numerous part-time residents located at the southern end of the Kenai Peninsula, across Kachemak Bay from Homer. Access to Seldovia is provided by ferry from Homer by the Alaska Marine Highway System (AMHS) through passenger only service during the summer season and air service which is restricted to daylight hours and by weather conditions. The City of Seldovia is interested in enhancing economic development by providing additional jobs for local citizens as well as attracting others to move to Seldovia. Employment opportunities have decreased substantially during the past few years, resulting in greater unemployment. The City desires to further evaluate the potential for economic development that will result in a decline in current levels of unemployment and underemployment. The City desires to build upon the existing employment base, which is primarily dependent upon fishing, tourism (including summer homes) and other resources, as well as the government sector. This study evaluates opportunities in existing business sectors as well as the growth potential in such industries as mariculture, mining and manufacturing. The_purpose_of this study is to evaluate the economic development opportunities available in Seldovia and_to develop_an_action plan _to bring these opportunities to fruition. The study and action plan_are designed to be reasonable and practical so that they can be implemented. In_addition, the study is designed to maximize local participation. Economic development studies are useless unless they reflect the desires of the citizens within the context of realistic and reasonable development. The following executive summary presents the conclusions and ___ recommendations _that__ will stimulate _ economic development in and around the City of Seldovia. BST Associates Pagel City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Finding Number One : Seldovia's Population Base has Greatly Decreased in the Past Few Years This decline is due primarily to a loss of employment opportunities, especially those at the John Cabot cannery. The cannery, employing between 40 and 60 workers, stopped production in October of 1991. The number of Seldovia residents has declined rapidly in the past few years. Falling from a high of 479 in 1970, the 1990 Census placed the City's population at 316 persons. It is estimated by the Alaska Department of Community & Regional Affairs (ADCRA) that the population has contracted further to 302 in 1992. Figure ES-1 Population Change City of Seldovia 479 460 437 ; 1 i 1960 1970 1980 1990 1992 Year Source: U.S. Census BST Associates Page 2 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Finding Number Two : The City's Economy was of 1992. If inflation were taken into account, the decline would be Very Dependent on the Cannery even greater. Total employment dropped from approximately 195 with the cannery to approximately 140 without it. For a community with a population in the low 300s, this was a severe blow: The loss of cannery employment has had a profound impact on the remaining jobs in the City, especially support services and retail sales. = Individual service and retail businesses were strained to the Current dollar taxable retail sales dropped 2.7% in 1991 (the year breaking point the cannery closed) and fell further 0.6% in the first three quarters Figure ES-2 Changes in Taxable Sales Quarterly Trends Thousands 700 600 500 400 300 ‘ool 100 - yy Ai | OH BA. 27... HH 90-1 90-2 90-3 90-4 91-1 91-: 0 Hl Retall Sales Services J Hospitality Source: Kenai Borough, BST Associates BST Associates Page 3 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary = The City budget was placed under stress, requiring a reduction in the number of employees and reduced hours for services. This down trend will continue unless the economic activity in the city improves. = Businesses with large inventories considered options for liquidating overhead. = Those individuals unable to find work moved elsewhere. Finding Number Three : The City's Economy must become more Diversified to Protect against Sudden Future Shocks A goal of this study is to evaluate means to develop a more diversified economic base and to put community assets back to work. Key elements of the strategy include : = Building on the existing economic base = Diversifying where possible and appropriate = Relying on private sector initiative supplemented by local government assistance where appropriate " Building a year around economy while bolstering the seasonal economy = Improving the utilization of existing assets Finding Number Four : The City's Economy has Numerous Positive Options for Growth There are several good candidate opportunities for growth, including expansion of existing businesses and development of new sectors. BST Associates analyzed these opportunities based upon interviews with existing local business operators, other business and governmental leaders, and a review of relevant trends. Using a number of criteria, these potential opportunities were evaluated. The results are contained in the tables below. First, the chances for success of each potential opportunity were evaluated. Second, the relationship of the activity to City boundaries was assessed. Finally, the potential scale of impact of the opportunity on the City's economy was evaluated. Each of these opportunities is briefly reviewed below. Following this discussion, a strategy for further developing the economy is detailed. The Seldovia economy is expected to continue to be heavily dependent on fishing and tourism, but other activities may be developed which will provide income and jobs as well as assisting in diversification of economic activity. eee BST Associates Page 4 City of Seldovia Seldovia Economic Developmenv/Tourism Study Executive Summary Table ES-1 Evaluation of Potential Opportunities for the City of Seldovia Potential Chances of Within Outside Impact on Opportunity Success City Limits City Limits Economy Fish Processing High Yes No High Mariculture Medium No Yes Low to Medium Tourism High Yes Yes High Forest Products Low to Medium No Yes Low to Medium Cottage Industry Medium Yes Yes Low Arts & Crafts High Yes Yes Low Mining Chrome Low No Yes High Quarry Medium Yes Yes Low Wilderness Education High Yes Yes Low Marine Research Low to Medium No Yes Low Senior Housing High Yes Yes Low to Medium Second Homes High Yes Yes Low to Medium Source: BST Associates Page 5 aaa BST Associates City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Finding Number Five : Fish Processing is Returning to Seldovia Fishing and fish processing have long been the mainstay of the economy of Seldovia. At the present time there are 2 canneries in the City: the John Cabot plant and the Seldovia Native Association plant. In recent years, fish processing has fallen on hard times, as seen by the closing of the John Cabot plant in October of 1991. However, there is cause to be optimistic about the future prospects of fish processing in Seldovia. On December 4, 1992, the cannery's plant and equipment were sold to Dr. Stokes, owner of North Pacific Seafoods, Inc. North Pacific operates a fleet of several vessels in Kodiak and Eureka, California. Dr. Stokes intends to invest significantly in the processing plant, especially in capital equipment. The firm is well connected with markets throughout the world due to its other ventures. It is proposing to develop the plant in value-added fisheries. Discussions with other processors and North Pacific indicate that the plant will continue to process salmon as well as other species and will place more emphasis on value added products. The development of the plant will be driven by market forces. Discussions with owner representatives indicate that the plant could be involved in pacific cod in the round, fillets and blocks, salted cod, smoked black cod, and smoked salmon among other products. BST Associates Page 6 Efforts are being made to open the plant as soon as possible. The owners estimate that the local employment at the fish processing plant would be approximately 15 to 35 people working year around. The payroll could range from $480,000 to $1.2 million per year. In addition, the owners are interested in buying as much of the fish as possible from the local fleet. However, this may require changes in gear and fishing patterns. Local fishermen have expressed their interest in providing fish to the fish processing plant. Thi 1 1 It may also be possible for the Seldovia Native Association plant which has been inactive for ten years to assist the John Cabot plant in value added processing. Finding Number Six : Mariculture Opportunities are in their Early Developmental Stages Marine aquaculture or mariculture is defined as the farming of marine finfish, shellfish, crustaceans, and seaweed as well as the ocean ranching of anadromous fish. Blue mussel mariculture was started at Halibut Cove by Otter Seafarms (James and Nancy Hemming) using longline culture systems in 1984, when approximately 410 pounds were harvested. Since 1984, aquaculture in Alaska has increased significantly but still remains at an early stage of development. City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary A major turning point was the enactment of new laws and regulations permitting aquaculture by the State of Alaska in 1989. While the state prohibited raising finfish, it allowed other aquatic farming. In 1990, there were reportedly 90 permit applications with 28 permits issued and 26 in a pending status. In 1990, the Department of Fish and Game (ADFG) estimated the sales from aquatic farms to be $77,225 including $3,718 from mussels. Most of these sales came from two farms, one in southeast and one in Prince William Sound. Based upon forecasts by ADFG, oyster production could reach $1.8 million by 1994. There are 5 permits in Jakolof Bay, 9 in Halibut Cove and one each in Kasitsna Bay and Little Jakolof Bay all of which last until 1994. In addition, 7 additional permit applications were received in 1992 for Kachemak Bay. Mariculture is in its very early stages of development in Kachemak Bay. However, it appears that initial ventures are proving successful. Most of the activity that could impact Seldovia is occurring in Jakolof Bay. Seldovians are becoming involved in the business. Others may choose to become involved as well. It should be emphasized that aquaculture entails some risk and is labor intensive. Finding Number Seven : The Tourism Industry is Blossoming in Seldovia ferry, airplane and via the Alaska Marine Highway System. This represented approximately 2.4% of the 680,000 people that visited the Kenai Peninsula. About 71% of the tourists came to Seldovia by means of the four tour boats that ply between Homer and the City: the Rainbow Connection, Endeavor, Denaina and Tulchina. The season extends from May through September. Most stay for the day. However, approximately 1,842 or 16% of the passengers aboard tour boats stayed overnight. An additional 3,343 tourists arrived in Seldovia by air, almost all of whom flew on three air services (i.e. Homer Air, Southcentral and Gulf Air). Air traffic represented 39% of total tourist traffic. The Alaska Marine Highway System Ferry M/V Tustumena carried 1,426 passengers to Seldovia, an estimated 90% of which were tourists. Role of Tourism in Seldovia's Economy Tourism plays a very significant role in Seldovia's economy. It is estimated that approximately 19% of Seldovia's total 1991 taxable retail sales is directly attributable to tourism (i.e., approximately $559,000 in taxable retail sales were attributable to tourism). BST Associates Page7 City of Seldovia Seldovia Economic Developmen/Tourism Study Executive Summary Opportunities for Additional Tourism == Interviews with industry officials indicate growing visitor interest in the area. properly. Typically, these longer duration visitors also would be interested in guided tours, fishing trips, cultural and historic events and local arts and crafts. The development of the industry should focus on longer stays by tourists during the summer season. Efforts to attract group tours, conferences and other parties could be very successful if marketed Figure ES-3 , Travel to Seldovia 1992 Thousands 2 1 0+ + T T T Jan Feb March Apr May June July Aug Sept Oct Nov Dec Passengers —- Tour Boats ~-*-Ferrles ~*~ Alr Planes Sources: State of Alaska, BST Associates BST Associates Page 8 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary At the same time, day tourists will continue to visit. Day tourists are extremely important to the local artists, artisans and restauranteurs. Finding Number Eight : Forest Products Opportunities are Limited The Kenai Borough Economic Development District (EDD) has recently evaluated opportunities for utilizing the timber resources impacted by the spruce beetle, although the beetle has not effected any resources around Seldovia. Markets for logs and chips have been developed and dock improvements are being made at Homer. The EDD has focussed on lands owned by the Borough and state in the central and southern Peninsula but north of Kachemak Bay. Virtually all forest lands surrounding Seldovia are owned by the Seldovia Native Association (SNA). SNA's interest in logging are not known at the present time. Logging is however proceeding at Windy Bay south of Seldovia. The opportunities for logging are somewhat limited at the present time due to the large volume that is being harvested elsewhere in Alaska. In addition, the international recession has suppressed demand. Opportunities to develop lumber mills are also limited. The mill in Seward has recently been sold and will again begin lumber manufacture. Small scale lumber operations in Seldovia are possible. However, the market for these products is typically local home construction. These efforts will benefit from further growth of year around and seasonal houses in the area (discussed below). In addition, development of an export log house industry also appears viable. However, all forest product development will depend upon SNA's activities which are beyond the control of the City of Seldovia. Finding Number Nine : Arts and Crafts and Cottage Industry Development is Possible but will have Limited Impact on Seldovia's Economy Seldovia has a very active arts and crafts industry. An arts/crafts cooperative - Synergy - represents numerous local full time and part time artists. In addition, several other artists and craftspersons live in the area. Much of the local arts and crafts sales are dependent on day tour visitors coming from Homer. However, sales are relatively small and concentrated in the summer season for the tourist market. The summer season is typically very frenetic after which almost all retail activity ceases. A prime goal of the local artists/craftspersons is to develop a better year around base of sales. This depends on attracting interest from retailers elsewhere in Alaska and the lower 48. An obstacle to overcome in this effort is the wholesale price that retailers would require. Typically, retailers "keystone" (or double) the wholesale price to establish the retail price. This would require a much lower sales price that may be unacceptably low to BST Associates Page 9 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary local artists and craftspeople. Other means to expand the arts and crafts sector are discussed below. Finding Number Ten: Chrome Red Mountain and Clam Point are the only sites in Alaska where chromite has been mined. A total of 30,000 short tons from both the Star No. 4 and Chrome Queen Mines at Red Mountain and from the Reef Mine at Clam Point was produced for the arms industry during World Wars I and II and the Korean War. The Red Mountain Star No. 4 is connected by a 10 mile road to Jakolof Bay. This mine was owned by Union Carbide. It was in production in 1955, employing 25 people and producing 600 tons of ore per week, which was shipped to a plant for milling, presumably in Juneau. A total of 33 chromite deposits have been identified at Red Mountain. The slowdown in demand for metallurgical and chemical products (due to the worldwide recession) has placed a damper on the potential for exploitation of Seldovia's chromite deposits. However, there is some mining activity in the area. The North Pacific Mining Corporation, a wholly-owned subsidiary of CIRI owns the mineral rights to the Red Mountain mine and is attempting to market the mine to one of the large chromium producers. There is hope that by sometime in early 1993, the potential of these discussions can be assessed. Given the low grade but relative high quality of the Red Mountain chromite, it appears that if the ore were mined it would require beneficiation or smelting to produce shipping-grade concentrates. The deposits are accessible to tidewater and to existing transportation links. If the mine were activated, it would likely produce a product for use in the international automotive industry (i.e. Japan, Korea or PRC) or the chemical industry. Currently, the majority of chromite ore used in the U.S. comes from Khazakstan in the Commonwealth of Independent States (formerly the USSR) in Central Asia and from South Africa. (PimpacPonseldovia.. If the mine were activated in Red Mountain, it would have a very added cou ; . TS would be required. Second, the beneficiation plant (i.e. smelter) could employ as many as 200 people year around. In addition, a | facility of this type would ae See eee of a The US Bureau of Mines conducted an economic feasibility study on the Red Mountain mine in 1985 and found that it would generate a positive but relatively low return on investment. CIRI is actively attempting to attract financial interest from potential investors. However, these efforts have been difficult to date because financing requirements are so high, the international eee eee —--re—O—Oonao————————— BST Associates Page 10 City of Seldovia Seldovia Economic DevelopmenvTourism Study Executive Summary recession has reduced demand and competition from other mines is great. As a consequence, the development of Red Mountain mine although still possible faces an uphill battle. Rock & Quarry Resources — The rock found in the Seldovia area and Jakolof Bay has been utilized in the past for roadwork and erosion protection projects. The bulk of the rock resource requires drilling and blasting prior to processing. Processing for aggregate typically requires some degree of crushing depending on project specifications. A processing plant can use a crusher to remove unacceptable (deleterious) materials. Deleterious material is material that may prove harmful to the final product for which the aggregate is used. Crushing is needed to reduce the size of the stone or rock material to a size specified by the end user. The key issue related to the marketability of Seldovia rock is the rock's quality, distance from "potential" market opportunities (i.e., users), cost to process and transport and competition from other potential sources and suppliers. Of extreme importance in Southcentral and other parts of Alaska is the ability of rock to withstand freeze/thaw conditions without degradation. At the time of this study, we have not obtained a final specificity regarding the quality of the Seldovia rock resource. A previously used quarry approximately 2.5 miles up Seldovia Bay is currently proposed for this project with loading proposed at the former log storage yard. Currently the immediate and future opportunity for rock obtained at a Seldovia area source is in the Anchor Point, Kachemak Bay and Seldovia area. The immediate opportunity for Seldovia/Jackolof Bay rock is the erosion protection project located on the Homer Spit. Herdon & Thompson was the low bidder on this contract. The armor protection requirements for this project necessitate two classes of rip-rap totaling approximately 40,000 cubic yards of material. The lower Kenai River area has an ongoing demand for armor protection for erosion protection and is currently utilizing gabions for this purpose. Immediate projects were not identified for this area, however, future projects requiring significant quantities of armor protection and aggregate may provide another opportunity for Seldovia's quarry resources. The opportunity for rock export to locations north of the City of Kenai is limited because of other existing sources and the distance/cost for transportation. ck demand in the Homer/Kachemak Bay area provide the hest potential opportunities for Seldovia quarry rock. One commendation that should be given further consideration by the ovia Native Association is the development of a loading ity which would "potentially" enhance the ability to respond e quickly to market opportunities as they develop. The impact on Seldovia from rock quarry exports is expected to be fairly small in terms of the number of jobs that might be BST Associates Page 11 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary generated. However, if resources are employed in a way that minimizes negative impact to other uses, rock quarry activities will continue to enhance Seldovia's economy. Finding Number Eleven : Opportunities for Wilderness Education and Research Appear Favorable A private entrepreneur is currently planning to establish a wilderness education center in Seldovia in cooperation with the owners of Harmony Point Lodge. Although marketing plans have not been firmly established, the focus of the center would be to attract groups interested in outdoor education, photography and other areas. orts should be made to assist the developers where possible to further stimulate this activity. Marine Research Interest has been expressed in developing marine research activities in Seldovia. However, these activities are widely sought by almost every coastal community in Alaska. Seward, Valdez, Cordova, Homer and others are currently vying for limited funds to establish marine research facilities. Facilities such as the Center for Alaskan Coastal Studies (Homer), China Poot Bay and others are already well established. The opportunity for Seldovia to become involved in this activity by developing a new research facility is limited. However, in Kasitsna Bay, there exists an excellent marine research and education center owned by National Marine Fisheries and operated by the University of Alaska. Funds to fully develop the center have been very difficult to obtain and as a consequence the facility has been underutilized during most of the last fifteen years. The University of Alaska is currently attempting to generate additional interest in the facility by offering courses in environmental and/or wilderness interpretive education and undertaking research to benefit local processors and possibly the aquaculture industry. Efforts to help the facility find funding should be explored. In addition, the facility presents a natural tie-in with the proposed wilderness facility and the Seldovia tourism industry. BST Associates Page 12 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Finding Number Twelve : Senior Housing and Second Homes are Potential Markets ond Homes existence of a large pool of vacant housing can be considered sset for economic development. As of 1990, there were 92 nt units available in Seldovia. This was nearly 42% of the housing stock. Of these, approximately 58 were designated easonal use, 2 were for sale, and 22 for rent. Housing sales and rental prices in Seldovia are now very attractive, especially when compared to Alaskan averages. The median value was estimated to be $75,900 in Seldovia as compared with $94,400 in Alaska. The development of the cannery will absorb some of the existing housing stock. However, a substantial amount of housing will still be available. The City should consider promoting vacant available real estate in Anchorage and Fairbanks as well as outside in the Lower 48. Senior Housing Seldovia has a high percentage of senior citizens relative to both Alaska and the Kenai Peninsula. There is potential to further develop the market for senior citizens. There is much in Seldovia that seniors can find attractive. The City's quality of life: small town atmosphere, general feeling of safety and security, the sense of freedom, and its picturesque setting are all appreciated by current residents as responses to the household survey indicate. These attributes of the City can serve as strong selling points to the more independent and adventurous retirees who can enjoy and appreciate the Alaskan life style. Seldovia's climate is temperate, lacking extreme temperature highs and lows, and averages about 25 inches of precipitation per year, about one-half the rain fall in Juneau. Housing is currently available and relatively inexpensive. There is one existing senior subsidized housing development, Lakeside Terrace, in the City. An additional inducement is the approximate $4,000 per person per year in longevity bonus and dividend payments that comes with Alaskan residence. Moreover, the City already has a high concentration of seniors, and, with the addition of a significant number of new seniors, the pool of elderly so created could draw investment into supporting retiree-servicing businesses that could then act to overcome the existing lack of such facilities. A concerted marketing effort, targeted to seniors, using, for example, advertisements placed in the elderly-orientated media, could be effective in bringing retirees to Seldovia. Note that one of the advantages of retirees to an area's economy is the economic stability they bring; regardless of the condition of the local or national economy, social security, pension and bonus/Alaska dividend checks continue to flow in. This provides an almost recession-proof base upon which local businesses can build. Many of the above constraints such as lack of amenities are difficult to ameliorate initially, although over time, if the marketing campaign is successful in bringing seniors to the City, investment el BST Associates Page 13 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary and facilities to serve them will soon appear. Nothing succeeds like success itself. Finding Number Thirteen : Manufacturing, Repair and Selected Services Have Chances of Success Manufacturing & Repair Manufacturing in Seldovia is limited to businesses which satisfy the local market or utilize local resources. The cost of transporting resources to Seldovia and/or transporting products to the market make other manufacturing opportunities infeasible. Seldovia has an opportunity to manufacture forest products (discussed above) and to enhance the local repair industry. The opportunity to develop a boat repair facility appears favorable for several reasons (i.e., the City has obtained some funding from the State and is asking for more and the fish processing plant is reopening). There is potential to develop repair businesses to serve local boats (both commercial and recreational), autos, and small machine and electrical equipment and these opportunities should be pursued. Other manufacturing ventures that rely on outside resources and markets (such as banjo or airplane manufacture) are less likely to succeed, given the great distance from markets and the concomitant high transportation costs. However, these opportunities depend to a great extent on the individual undertaking the enterprise and the scale of the venture. Other Services & Businesses Seldovia boat owners could participate in ferrying passengers from Homer to Seldovia if interested. Business opportunities oriented to tourists such as a latte cart, sale of baked goods, clam chowder, additional fishing charter and other products/services also appear favorable. Business services such as tax preparation, computer services and other similar services are also possible but depend upon the right person with the right market niche. Finding Number Fourteen : The City and the School District are Very Important to the Local Economy The City Local government plays a very important role in the Seldovia economy. The City and the school district provide a multitude of services that would not be provided in their absence. Second, the City and the school district have a substantial economic impact in terms of employment and local spending. Third, both bring in a significant amount of grants and loans for capital development projects. BST Associates Page 14 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary The City provides a wide range of services for the local citizens of Seldovia as well as those located outside the City limits. These include : 1. Police 2. Fire 3. Emergency Medical Services (EMS) 4 5 . Harbor . Public Works A. Water B. Sewer Cc. Snow Removal D. Street Maintenance 6. City Clerk 7. Custodian City provides space for library, clinic and mental health, space for EMS and numerous other facilities Employment The City is also a very important employer in the local economy. Approximately 50% of the City's budget (i.e. $383,163) goes directly to employee salaries and benefits and outside local citizen contract labor. Susan B. English Elementary and High School has an operating budget of approximately $1 million, of which $780,000 goes to salaries and benefits. To put this into perspective, the cannery may have a payroll between $480,000 and $1,000,000 depending on market forces. At the low end of the employment range, the City generates approximately 75% of the cannery's payroll and the high end approximately 35% of the cannery's estimated payroll; the school district has between 78% and 162% of the cannery's estimated payroll. The City generates approximately $500,000 to $1.3 million per year in capital development funding per year. It is highly unlikely that this funding would be available without the services of the City. i a et BST Associates Page 15 City of Seldovia Seldovia Economic Developmenv/Tourism Study RECOMMENDATIONS Recommendation Number One : Assist New Owners Where Possible The reopening of the John Cabot plant is very good news for the City's economy. The City and local businesses should assist the new businesses such as this one where possible. = Coordination ate ae were a ™ Upgrading of the small boat harbor to allow all tide access by larger vessels = Discuss potential for small boat haulout to assist local fishermen and the cannery as needed Recommendation Number Two : Encourage Local Participation in Mariculture through Existing Organizations Those citizens interested in mariculture should be made aware of research being undertaken by the Kenai Peninsula Economic Development District (EDD). The EDD is evaluating markets and attempting to form an Association. In addition, the EDD is promoting development of a Mariculture Technical Center that would support research and a private oyster hatchery. Executive Summary The EDD can assist in making interested parties aware of how to become involved in the business. It is not known if Seldovia Bay is a potential area for mariculture development. As a consequence, production will probably not occur in the City limits. It is however possible that the John Cabot cannery and/or the SNA cannery could be used to shuck and process oysters, mussels, clams and other products for the consumer market. Recommendation Number Three : Promote the Tourism Industry A major key to realizing Seldovia's tourist potential is a concerted and organized marketing campaign. Some of the elements of this campaign are listed below. Future follow-on efforts by the City should be devoted to developing a marketing campaign including brochures and a video presentation. Local citizens should be educated about the value and importance of tourism to the local economy. Efforts should also be undertaken to minimize any negative impacts from tourism by providing easy access and additional attractions for tourists. The tourist market should be developed as follows : BST Associates Page 16 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Alaska Market Given the size, proximity of the market and proclivity to visit the Kenai Peninsula, efforts should be concentrated on the Anchorage and railbelt area markets. 1. Advertise in Anchorage papers (i.e. joint air/tour boat and lodge packages) during summer 2. Create promotional campaigns similar to $99 week-end/air & boat tours 3. Advertise along Peninsula highway 4. Advertise in Homer and Seward: (where it would be most visible) 5. Contact Anchorage media especially travel writers for story 6. Create a brochure and video 7. Develop other marketing materials: pens, T-Shirts (see arts & crafts), etc. Non-Alaskan Market 1. Approach travel writers and travel agents in Washington, Oregon, and California 2. Advertise on Planes: Air Line magazines 3. Advertise in Alaska/Anchorage promotional materials such as Anchorage Visitors Guide. NOTE: SELDOVIA NOT MENTIONED WHEN TALKING ABOUT KENAI PENINSULA 4. Advertise in Anchorage Airport/Visitor Info Center 5. Contact travel magazines and publications such as Alaska Magazine, Conde Naste, Best Places, etc. 6. Contemplate joint marketing : 1) all Seldovia businesses, 2) all Peninsula, 3) selective Peninsula (perhaps South Kachemak Bay businesses) 7. Advertise in more up-scale publications: The New Yorker, New York Magazine, Gentlemen's Quarterly, The Atlantic, LA Magazine Both Markets 1. Develop more attractions: tours, museum, complete boardwalk (The walking tour signs are a good example). 2. Develop more facilities: latte stands, art galleries, bakery, chowder shop, etc. 3. Further develop local goods to sell: arts & crafts, cottage industry products (discussed below) 7. Fishing charters need to be € aggressively and marketed more ANS 8 Expanding boating opportunities sailboat, kayak and other M Ly vessel (self powered paddle wheelers (self powered p: ) apr 4 9. Boat moorage and/or storage for visitors vessels BST Associates Page 17 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Recommendation Number Four : Develop More Tourist Resources in Seldovia Several urban design/planning issues are key to the development of a unified and effective improvement program for Seldovia's downtown waterfront. These issues include: A. The need to develop a strategic Waterfront/Main Street Physical Improvement Plan. The existing City (including buildings and natural environment) possesses a unique and very attractive setting. This setting, coupled with the community's physical isolation and history, are all natural attractors for tourists and visitors. However, if this modest but growing tourist industry is to exist harmoniously with local residents and existing businesses, the City needs to make provisions for its incorporation into the community's lifestyle. Places for tourists to visit, promenade, eat and browse need to be planned so they don't disrupt the cities other activities. The first step in this process is to develop a strategic Physical Improvement Plan for the downtown waterfront, because it will be the focus for this industry. The improvement plan should define a series of strategic improvements aimed at accomplishing the following objectives: 1. Providing visitor/tourists facilities for walking, shopping, eating, etc. which can help reduce conflicts between tourist activities and the City's other activities. These facilities would be concentrated near the waterfront and include a boardwalk, public restrooms, indoor and outdoor meeting areas, convention space, etc. 2. Providing community improvements which would improve Seldovia residents normal activities including vehicular circulation, pedestrian connections and business operational requirements. 3. Providing facilities to support the community's special events which, although they may attract tourists, are intended for the use and enjoyment of local residents. These facilities include public gathering areas and community services (i.e. a Community Center) to support holiday events, seasonal activities, etc. The product of this plan should be a strategic improvement plan for the downtown waterfront recommending: Tourist/visitor improvements Community support improvements Special event facilities Design theme concepts Potential project construction budgets Priorities for project implementation B. History as a desirable theme The most unique feature of historic Seldovia was its system of boardwalks and catwalks connecting the City's canneries, stores, shops and homes. When the City was reconstructed after the 1964 El BST Associates Page 18 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary earthquake, this unique feature was almost completely lost during the construction of the current seawall and fill. Only isolated examples of the original boardwalks remain, but these examples are the natural starting point for the development of a city design theme. Although it is functionally and financially unfeasible to recreate Seldovia's original setting, a sensitive re-creation of the boardwalk concept is possible. Several considerations will be critical in the development of a boardwalk theme. These include: Authenticity: A good theme will draw inspiration from features which were actual and important parts of the City's history. Appearance: The theme should be an attractive addition to the City. It is important to avoid stylized themes, which give a false image not accurate to the community or its image. . Function: The physical components of the theme should build a facility which not only supports the City's tourism industry, but one which also improves services for the community and its residents as well. Stress Quality Over Quantity: Don't skimp on quality in construction and design. The long term savings in maintenance costs will more than offset the savings of cheap construction practices. If budgets are limited, build "less of more" instead of "more of less." . Build Only What The City Can Afford To Maintain: A project that can not be well maintained is its own type of negative theme. 6. Use Local Materials, Labor and Artisans Whenever Possible: The project's community support should extend to more than just being able to use the final product. C. Boardwalk A waterfront boardwalk will be a key element in any downtown development plan and should extend throughout the central waterfront. It can be built in phases with Phase I connecting the existing boardwalk to the breakwater/boat launch and Phase II connecting the small boat harbor to the historic Boardwalks along the slough. Preliminary construction budgets are approximately $464,260 for the boardwalk project in 1993 dollars. The City needs a Community Center/Meeting/Tourism Support building. The City can add local employment and increase the value of its tourism industry while at the same time, providing much needed services to the local community. The community center would contain meeting spaces for local events, social gatherings and special holiday events to support the local community. The tourism industry would be supported by having facilities for small convention meetings, seminar presentations, A BST Associates Page 19 City of Seldovia Seldovia Economic Developmen/Tourism Study interpretive and museum displays and facilities for the sale of local arts and crafts. The building might contain the following facilities. Initial Building I. General Purpose Meeting/Community Room: For community meetings, tour lectures, small conventions, special presentations, exercise classes, and other special events. Should have a wood floor, 10 foot ceiling height and stage area (possibly portable). (size: 2800 SF plus 300 SF storage = 3100 SF) 2 Meeting rooms: 1 at 500 square feet and 1 at 1,000 square feet with a moveable dividing wall. For small meetings, lectures, classes or to support small convention meetings. Doubles as a small child care area during other meetings. (size: 1500 SF plus 150 SF storage = 1650 SF) Teen/Game Room: A place for young people to meet and play games. Small pool table, TV area with VCR and a place for table games. (size: 1100 SF plus 100 SF storage = 1,200 SF) Kitchen: A commercial quality kitchen. Located adjacent to the large general purpose room. Would provide food for special events, celebrations and meetings. (size: 450 SF) Reading/Computer Room: A quiet room with magazines, tables and 1 to 3 computer Executive Summary meeting room. (size: 400 SF with 50 SF storage = 450 SF) 6. Fishermen's Laundry and Reading: A place for fishermen and boater's to do laundry and have an off-boat reading lounge. (size: 400 SF with 50 SF storage = 450 SF) 7. Lobby: Large lobby with space for waiting area, lounge and interpretive displays (size: 1,500 SF) 8. History alcove: A room adjacent to the lobby which houses a local history museum (size: 650 SF plus 200 storage = 850 SF) 9. Gift shop: A space for the display and sale of local and regional crafts, gifts and publications (size: 200 SF plus 50 SF of storage = 250 SF) 10. Administrative Offices and reception/information area: (size: 750 SF) 11. Employee area: coffee lounge, coats, storage, etc. (size: 100 SF) 12. Public restrooms: (Interior accessible = 400 SF ; Exterior accessible = 100 SF) TOTAL AREA = 11,250 SF Building support area: includes area for mechanical equipment (heat/ventilation), janitor, area covered by walls and other terminals where people can practice computer skills or miscellaneous space 21 % of total area 2350 SF students can study. The room also doubles as a small TOTAL BUILDING AREA = 13,600 SF BST Associates Page 20 City of Seldovia Ce a ta ( Seldovia Economic Development/Tourism Study Executive Summary The basic building planning budget should expect the following costs: Component Cost per Square Foot Foundations and site preparation $32.40/sqft) Building shell and structure $78.00/sqft Interior finishes $39.00/sqft Subtotal per SF of $149.50 $150.00/SF Equipment at 10% of building cost per SF 15.00 Site improvements per SF of building 7.80 Subtotal $172.80\SF Design contingency at 15% 25.92 Building cost per SF 198.72 City costs: permits, fees, insurance, testing at 5% 9.94 Contractors general conditions at 20% 39.74 Construction progress review at 7% 13.91 Construction contingency at 10% 19.87 TOTAL Building Costs per SF $305.82/SF Building = Phase I 13,600 SF x 305.82 = $4,159,150.00 Phase II options would add 8100 x 305.84 = $2,477,142.00 Inflation at 5% a year adds to Phase I for construction in 1994 = $4,367,100.00 in 1995 = $4,585,460.00 BST Associates Page 21 City of Seldovia Seldovia Economic Developmen’/Tourism Study Executive Summary Eyreuneo Ulenner RAT FORM. ' Leacree ve Ware Figure ES-4 Boardwalk Section BST Associates Page 22 City of Seldovia — | -_ ae a , = Seldovia Economic Development/Tourism Study Executive Summary # Ic'- 18". GauwniveD Steeu Pre s Fiuep w/ Concrete 8'-o" Seton Ib'- 0 Q Pucks OF Pemovnele GEGMENTS. Protectwe PBotarp Dea Frotectve BoLtaro Figure ES-5 Boardwalk Details BST Associates Page 23 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary SPAN wb af ii wane a =a ae pee i } a Hh ® \ Vi a ! oon et [| <— i 4 ; . aun = v {ry = — -. f | ry V I MINTITIIIIIN ORS SAA Figure ES-6 Seldolvia Boardwalk ee BST Associates Page 24 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Potential Optional Spaces or Phase II Construction A. Small auditorium capable of seating (3,000 SF) B. Counseling and Family Service Center (1,200 SF) C. Sales/studio space for local artists and craftspeople to display, do studio work and sell local products and artwork. This would be lease space for potential tenants and would provide some income to the center (2,500 SF) Subtotal, Phase II construction of 6,700 SF; Support area at 21% area 1,400 SF TOTAL SF of 8,100 SF Recommendation Number Five : Expand the Base for Local Arts and Crafts Efforts should be undertaken to identify merchants, retailers and crafts fairs that could generate a fair price for Seldovia goods. The closer the proximity of the retailer, the easier this will be to establish and the lower the transportation costs. Efforts to establish relationships with Homer, Kenai, Soldotna and other Peninsula retailers should be undertaken. The Buy Alaska program at the Anchorage International Airport should be marketed. Ler eer rE FIT ITNT and herbs/spices should be marketed to Alaskan and lower 48 natural foods stores, national chains Celestial eco-retailers etc). (e.g., Seasonings, the tourist industry matures, other shops and galleries should developed. These efforts should be coordinated in the ntown area, using vacant well located buildings. In addition, the development of a community center would offer space for artists in residence to promote the development of the industry. The arts and crafts industry should also be promoted in the tourism brochures (discussed above). A mail order catalogue should also be considered. As an alternative, efforts for Seldovia products to be advertised in other existing catalogues should also be reviewed. Efforts to feature local arts and crafts should be a focus of the Fourth of July and other holidays. ere are definitely opportunities for further development of tage industries in Seldovia. The City can assist in the velopment by sponsoring a one or two day entrepreneurs nference with Barbara Brabec, Edie Pigg or another specialist in e field. This workshop could be coordinated as a part of Phase of the economic development grant. Elements of the workshop should include : = Product pricing techniques = Product line development = Product presentation and merchandising BST Associates Page 25 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary = Where the markets are and how to get at them The impact from these efforts is relatively small in comparison to overall tourism and fish processing activities but it is very important to the growing number of artists and craftspersons in Seldovia. Recommendation Number Six : The City should Continue to Develop the Small Boat Harbor The existing small boat harbor is well utilized. However, it has a constraint in providing easy access and moorage for larger commercial and recreational vessels. Larger vessels currently using the Seldovia Boat Harbor occasionally experience operational constraints on tides below minus (-) two feet. On extreme tides (i.e., tides lower than - 4.5 to -5 feet MLLW.) many of the larger vessels must use extreme care or cease operations during low water periods. The authorized project depth for Seldovia is -12' MLLW. However, the basin has been dredged in some parts of the authorized area to depths greater than - 12' MLLW. Water depths in moorage areas of the harbor beyond authorized project limits varies from -13 feet MLLW. to approximately -8 feet MLLW. Areas immediately adjacent to the main access channel and areas approaching the boat ramp have deficient water depths for the vast majority of the fleet when tides are below an average low tide. At extreme low tides none of the larger boats can deviate from the main 60' access channel without touching bottom. The authorized project limits of the Seldovia Boat Harbor should be increased from - 12' MLLW. to a minimum depth of -17' MLLW. Seventeen feet below MLLW is the existing depth of water in moorage areas currently utilized by the larger component of the commercial fleet. Additional recommendations include: increasing the width of the access channel from 60 feet to a minimum of 100 feet and requesting the Corp of Engineers to evaluate costs and benefits resulting from expansion of project limits within harbor berthing areas. Currently, several large commercial vessels utilize areas south and east of the authorized project limits for moorage. Recommendation Number Seven : The City could Promote the Manufacturing Base by Developing Projects such as a Small Boat Haulout Facility Manufacturing employment on the Kenai Peninsula has increased from 1,314 in 1984 to 2,066 in 1991. Most of the manufacturing employment (which is centered in Kenai/Soldotna, Seward and Homer) consists of fish processing, metals manufacture to support the fishing and oil and gas industries, commercial printing and forest products manufacture. Manufacturing employment in the Borough exists for one of two reasons : ™ It sells to and supports the local economic base (i.e. fishing) and/or = It utilizes local resources (i.e. fish, logs for lumber production, and chemical manufacture of byproducts of the oil and gas industry, etc.) BST Associates Page 26 City of Seldovia Seldovia Economic Development/Tourism Study Executive Summary Manufacturing in the Kenai Peninsula and especially in Seldovia will be limited to those activities which utilize area resources or a captive market, such as log house production, lumber manufacture and small boat repair. Other manufacturing ventures which do not utilize area resources and/or serve local markets are less feasible due to the cost of bringing resources to Seldovia and shipping products to the market(s). Lumber manufacture and log house building are discussed in other sections of the report. Taxable sales of manufacturing firms in the Kenai Borough range from approximately $6 to $7 million per year. Most of the taxable sales of manufacturing products consists of primary metal manufacture which is generally related to either boat building/repair or the oil and gas industry. Manufacturing sales have been fairly consistent on a quarterly basis. Taxable sales from repair services (including automobile __ repair, electrical/electronic repair and small machine repair) totalled $14.6 million in the first three quarters of 1992. Auto repair was $7.3 million, welding repair $970,000, electronic/electrical repairs were $853,000 and miscellaneous repairs were $2.3 million. In Seldovia, manufacturing (primarily small boat repair) has accounted for less than $5,000 in taxable sales during each of the past three years. In Homer, metals manufacture totaled nearly $350,000 in 1991. In Seldovia, repairs totaled $998 down from $12,000 in 1990. The opportunity exists to develop more manufacturing in Seldovia but this will require the development of additional facilities in Seldovia to support the fishing and recreational boats in the area. The City has recently completed a feasibility study of a boat haulout facility. The study indicated that the boat haulout facility could generate additional work in Seldovia but that it would be generally limited to repair efforts by local citizens. The facility is expected to break even. Since the conclusion of the study, several factors have improved the chances of the boat haulout facility: i.e. the City received $150,000 from the State, the fish processing plant is re-opening and the City intends to ask for additional funds from the legislature. The City should proceed with the development of a small boat haulout facility. This facility should begin by considering the usage of the existing boat ramp with a dolly system and expand as the market warrants. After completion, the facility will serve local and regional fishermen in manufacture and repair. In addition to assisting in repairs by individual fishermen, the facility could support the development of additional manufacture and repair services such as businesses that cater to automotive, small appliance/machinery, electrical/electronic repair and boat repair. Recommendation Number Eight : The City should evaluate Improved Ferry Access Ferry transportation to Seldovia is very important to businesses receiving and/or shipping products as well as to local citizens wishing to travel to the road system on the Kenai Peninsula. As a consequence, the Alaska Marine Highway System has served as a vital link for City residents and businesses. Approximately 2,000 BST Associates Page 27 City of Seldovia Seldovia Economic Development/Tourism Study to 2,400 passengers and 700 to 800 vehicles disembark Seldovia on an average annual basis. However, the scheduling of the ferry has been unpredictable, causing area residents substantial concern. In addition, the schedule of the AMHS ferry to Seldovia has not been as attractive as that available for other communities. Often, the ferry called two days in a row with either an overnight stay required or a brief 4 hour stay provided. This scheduling impacts resident and non-resident plans as well as business freight requirements. Ferry service is especially critical for businesses which ship freight (i.e., the cannery) or receive freight (i.e., Stampers and other businesses). With the ferry, freight costs approximately $200 per van. If the schedule coordinates well with the SeaLand and TOTE schedule to Anchorage, then ferry service is the best way to get produce from Homer to Seldovia. If the schedule does not coordinate, then produce either spoils or must use an alternative more costly form of transportation. Using barge service increases the freight cost to $1,500 per van. This additional cost must be reflected in higher food prices. It also impacts the cost of operating the cannery. The scheduling of the ferry system can also have a dramatic impact on tourist usage of the system. At the present time, the AMHS is planning a replacement vessel for the Tustemena. Recent meetings have been useful in requesting input from citizens on the features that the new ferry should have. Efforts should be undertaken to achieve a better schedule with AMHS. Executive Summary Alternative Ferry System At the same time, there has been interest in evaluating an alternative ferry system which goes from Homer to Jakolof Bay. Such a ferry might provide more frequent service. The distance from Homer to Jakolof Bay is 12.5 miles as opposed to 18 miles from Homer to Seldovia. The waters are also more protected on the Homer to Jakolof Bay route. From Jakolof Bay to Seldovia there is a 9 mile existing road. Access by this road would be possible for most of the year. However, in January and February, a steep stretch of road at Barabara Creek is very icy and may not be usable by freight trucks. Provision of an alternative ferry system should be considered. However, there are two generalized local concerns. First, provision of another ferry system should not replace service by AMHS. Second, some local citizens are concerned that more frequent ferry service would attract undesirable people. Alternative service should be more thoroughly evaluated for both its positive and negative aspects. BST Associates Page 28 City of Seldovia CHAPTER ONE INTRODUCTION Seldovia Economic Development/Tourism Study Chapter One INTRODUCTION STATEMENT OF UNDERSTANDING Seldovia is a small community of 316 full time residents (1990 Census) and numerous part-time residents at the southern end of the Kenai Peninsula, across Kachemak Bay from Homer. Access to Seldovia is provided by sporadic ferry service from Homer, which operates between April and mid January, and air service which is restricted to daylight hours and by weather conditions. The City of Seldovia is interested in stimulating its economic development by providing additional jobs for local citizens as well as attracting others to move to Seldovia. Employment opportunities have decreased substantially during the past few years, resulting in substantial unemployment. Although unemployment statistics for Seldovia are not available, it is generally thought that due to its weak economy unemployment in Seldovia is greater than that in the Kenai Borough as a whole. Annual borough unemployment has exceeded 11% throughout the past ten years. In 1990, Borough unemployment was 11.5% with 2,123 people actively seeking but unable to find work. This is an improvement over the higher rates registered in the early and middle 1980s, when unemployment reached 15% of the work force. However, current Borough unemployment Borough unemployment is particularly high in the off-peak season. During September through May, it exceeds 10%. During the summer months of June, July and August unemployment drops below 10% (i.e. 9.9% in June, 6,7% in July and 7.7% in August). This pattern is also experienced in Seldovia as fishing and tourism builds up in the summer months and then winds down. The City wishes to further evaluate its opportunities to stimulate economic development in order to decrease the current level of unemployment and underemployment. The City wishes to build upon the existing employment base which is primarily dependent upon fishing, tourism (including summer homes), and other resources (i.e. community facilities) as well as the government sector. The study evaluates the opportunities in existing business sectors as well as the development potential in such industries as mariculture, and arts and crafts. The purpose of this study is to evaluate the economic development opportunities available in Seldovia _and to develop an action plan to bring these opportunities to fruition. The study and action plan_is designed to be reasonable and practical so that it is can be easily implemented. In_addition, the study is designed to maximize _local_participation. _ Economic development studies are useless unless they reflect the desires of the citizens within the : : context of realistic __and__ reasonable remains much higher than the Alaska average, | Gevelopment. which stood at 7% in 1990. Typically, unemployment in the Kenai Borough has been about twice that in Alaska as a whole. BST Associates Page 29 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One With this overall direction in mind, the remainder of this chapter focuses on the economic and demographic characteristics of Seldovia. The intent behind evaluating historical growth trends is to document the status of the existing economy and to point to those assets that may be used to support economic development efforts. POPULATION U.S. Census tracking of the Seldovia population began in 1880. Since that first census, the dynamic growth and recent decline in population has been directly related to an economy based on the harvesting and processing of natural resources. In the 110 years since the 1880 count, each census except those in 1970 and 1990 showed an increase in population. Following the population decline recorded in 1970, which may have been directly related to impacts resulting from the 1964 earthquake, population growth rebounded in 1980 and passed the previous peak experienced in 1960. Seldovia underwent its second decline in population between 1980 and 1990. During this ten-year period, Seldovia had an average annual populated decline of 3.4%, which reduced the population to 316. During the 1980's, a series of events resulted in economic repercussions that were felt throughout the Kenai Peninsula Borough. Many of these events directly resulted from fluctuations or declines in Cook Inlet commercial fishery harvests. Within Seldovia, commercial fishing is a major influence on the life style and economy of the community. A review of the activities that impacted the economy of the area in the 80's provides indications of why Seldovia may have experienced a decline in populations during the same time. The events included significant changes in the Alaska fishing industry: major declines in the king crab catch from 1982 through 1985 and closure of the fishery from 1986 through 1990; closure of the tanner crab fishery in 1988 and drastically reduced catches in 1989 and 1990; major reductions in the shrimp harvest from 1987 through 1990; major declines in the dungeness crab fishery in 1989 and 1990; major fluctuations in the groundfish harvest from 1988 through 1990; and low sockeye salmon catches combined with low per pound prices in the early to mid 1980's. Actions that specificly impacted Seldovia include, the transfer of lots in Barabara Heights Subdivision (located outside the municipal boundaries) to SNA shareholders and subsequently to non-SNA shareholders while the statewide economic downturn in the mid-80's | and the Exxon-Valdez oil spill may have also contributed to the city's decline in population. It is important to note that this series of events could not have been foreseen or controlled by the residents or the City government. The Statewide economic downturn was caused by reduced crude oil revenues. Also, Seldovia has a very long history as a resource harvesting based community located in an area containing a variety of commercially harvestable timber resources. In the past, as demand for, or availability of, a resource declined, a different resource became the focus of attention. However, over the last ten years, nearly every major fishery plant that supports commercial fishermen _has experienced periods of closure, decline or, at the least, fluctuation. Any business or community facing such a period of uncertainty would have had to deal with shrinkage of the economy and population loss until alternatives could be established or stability returned. BST Associates Page 30 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-1 Kenai Peninsula Borough Population by City 1960-1990 Annual Average City/Area 1960 1970 1980 1990 Growth Rate Homer 800 1,803 2,209 3,660 5.2% Kenai 778 3,533 4,324 6,327 1.2% Seward 1891 1,587 1,873 2,699 1.2% Soldotna 332 1,202 2,320 3,482 8.1% Unincorporated 4792 7,024 14,077 24,318 5.6% Seldovia 460 437 479 316 -1.2% Total Kenai Peninsula 9,053 15,586 25,282 40,802 5.1% Seldovia as % of Borough 5.1% 2.8% 1.9% 0.8% Sources: Kenai Peninsula Borough Economic Development District, "1991 Situation and Prospects, July, 1992" and BST Associates The number of Seldovia residents has declined in an uneven fashion over the past thirty years (see Table 1). From a high of 479 in 1970, the 1990 Census placed the City's population at 316 persons. It is estimated by the Department of Community and Regional Affairs that the population has fallen further to 302 in 1992. Seldovia's population fell at annual average rate of 1.2% between 1960 and 1990, although the number of inhabitants increased by about 10% between 1970 and 1980 to a recent peak of 479. The City's 1990 population of 316 is down 34% from 1980 levels, and reflecting, among other things, the closure of the John Cabot Cannery. This decline is especially stark when compared to the growth experienced within the Kenai Peninsula Borough. The Borough's 1990 population of 40,802 is four and one-half times greater than it was in 1960; its annual average growth rate was 5.1% over this time period. The rate of population increase during the 1960-90 period in both Kenai and Soldotna was above 7% a year (7.2% and 8.1% respectively). The City of Kenai is the largest first class home rule city on the Peninsula, with a 1990 population of 6,327, while the Kenai/Soldotna area accounts for about one-quarter of the Borough's population. Homer (5.2%) grew at almost the same rate as the Borough. With the exception of Seldovia, the slowest growing city on the Peninsula is Seward, which has increased annually by a little more than 1% since 1960. Given the simultaneous loss of population in Seldovia and the growth in the rest of the Borough it is not surprising that the City's share of Kenai Peninsula population steadily fell from 5.1% in 1960 to 0.8% in 1990. BST Associates Page 31 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Figure 1-1 Population Change Seldovia and Other Peninsula Cities Thousands Year MMM Seldovia Homer EES Seward Soldotna [_] Kenai Source: U.S. Census Population Characteristics Gender The male-female ratio in Seldovia (52.8% male and 47.2% female) is almost identical to the ratio in the State of Alaska and Kenai Peninsula Borough. (see Table 1-2) Age Seldovia's residents tend to be clustered between the ages of 25 and 54, often called the productive ages. About 45% of Seldovians are in that age bracket, slightly less than the proportion in the State. However, overall, the population of Seldovia tends to be older than that of the Peninsula or Alaska. The City's median age of 35.5 is a little over 20% higher than Alaska's 29.4 and 14% above the average age of the Kenai Peninsula Borough. The graying of Seldovia's residents can be seen in the relatively high proportion of its population over 65 years of age: 10.1%. This is two and one-half time the proportion in Alaska and a little over twice the rate in the Peninsula. The relatively high share of elderly in the population is partly the result of the location of Lakeside Terrace senior housing development in the City. Race/Ethnicity Although Seldovia's population is predominantly white, it retains some ethnic diversity: A little over eight out of every ten Seldovia residents are white, 9.2% are Aleuts, 5.4% are American Indians, while a small BST Associates Page 32 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One number of Hispanics, Asians/Pacific Islanders, and Eskimos are represented in the population. The proportion of Seldovia residents who are natives: American Indians, Eskimos, and Aleuts, is about the same as that for the State of Alaska, but over twice the rate for the Borough. In addition, Seldovia is in close proximity to two predominantly Aleut communities : Nanwalek (English Bay) and Port Graham, where over 90% of the population is Native American. Figure 1-2 Age Distribution Seldovia and Kenai Peninsula Under 17 29.4% 18-24 5.1% 18-24 7.4% Under 17 32.8% Over 65 10.1% Over 65 4.9 25-44 38.0% 45-64 24.7% Seldovia Kenai Peninsula 25-44 30.7% 45-64 16.8% Source: U.S. Census, BST Assoc BST Associates . Page 33 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-2 Population Characteristics Seldovia, Kenai Peninsula Borough, and Alaska 1990 Percent Kenai Percent Percent City of of Total Peninsula of Total of Total Seldovia Population Borough Population Alaska Population Total population 316 100.0% 40,802 100.0% 550,043 100.0% SEX Male 167 52.8% 21,606 53.0% 289,867 52.7% Female 149 47.2% 19,196 47.0% 260,176 47.3% AGE Under 5 years 23 7.3% 3,795 9.3% 54,897 10.0% 5 to 17 years 70 22.2% 9,601 23.5% 117,447 21.4% 18 to 20 years 8 2.5% 1,345 3.3% 22,934 4.2% 21 to 24 years 8 2.5% 1,688 4.1% 32,913 6.0% 25 to 44 years 97 30.7% 15,510 38.0% 216,062 39.3% 45 to 54 years 45 14.2% 4,280 10.5% 53,929 9.8% 55 to 59 years 15 4.7% 1,387 3.4% 16,595 3.0% 60 to 64 years 18 5.7% 1,181 2.9% 12,897 2.3% 65 to 74 years 14 44% 1,503 3.7% 15,548 2.8% 75 to 84 years 12 3.8% 431 1.1% 5,570 1.0% 85 years and over 6 1.9% 81 0.2% 1,251 0.2% Median age 35.5 31.1 29.4 Under 18 years 93 29.4% 13,396 32.8% 172,344 31.3% 65 years and over 32 10.1% 2,015 4.9% 22,369 4.1% RACE AND HISPANIC ORIGIN White 259 82.0% 37,089 92.5% 415,492 75.5% Black 0 0.0% 203 0.4% 22,451 4.1% American Indian/Eskimo/Aleut 48 15.2% 2,935 5.7% 85,698 15.6% Asian or Pacific Islander 5 1.6% 428 1.0% 19,728 3.6% Other race 4 1.3% 147 0.4% 6,674 1.2% Hispanic origin (of any race) 8 2.5% 726 1.8% 17,803 3.2% HOUSEHOLDS BY TYPE Total households 129 100.0% 14,250 100.0% 188,915 100.0% Family households (families) 67 51.9% 10,216 71.7% 132,837 70.3% Married-couple families 54 41.9% 8,456 59.3% 106,079 56.2% Other family, male householder 5 3.9% 558 3.9% 8,529 4.5% Other family, female householder 8 6.2% 1202 8.4% 18,229 9.6% Nonfamily households 62 48.1% 4034 28.3% 56,078 29.7% Householder living alone 50 38.8% 3105 21.8% 41,826 22.1% Householder 65 years andover 21 16.3% 567 4.0% D130 3.0% Persons living in households 316 100.0% 39,738 97.4% 529,342 76.2% Persons per household 2.45 219) 2.8 GROUP QUARTERS Persons living in group quarters 0 0.0% 1,064 2.6% 20,701 3.8% Institutionalized persons 0 0.0% 808 2.0% 4,574 0.8% Other persons in group quarters 0 0.0% 256 0.6% 16,127 2.9% Source: 1990 Census, BST Associates BST Associates Page 34 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Household Characteristics Seldovia's 316 people reside in 129 households with an average household size of 2.45. Seldovia's households tend to be smaller than the State's and the Borough's. This is partly because about four out of every ten Seldovian households are composed of a single person, which is 75% higher than the proportion in Alaska or the Borough. Moreover, Seldovia also has a significantly greater number of single householders above the age of 65; 16.3 % of all Seldovia's households are composed of a single person 65 or older. This is about 5.5 times the rate for the State and 4.2 times the rate for the Peninsula. Over 42% of all single householders are 65 or older. Consistent with a higher proportion of single family households, Seldovia has a lower percentage of married-couple families than either the Borough or the State. About 42% of Seldovian households are married-couple families compared to 56.2% for Alaska and 59.3% for the Kenai Peninsula. HOUSING At first glance, one of the most striking aspects of the Seldovia housing market is the large number of vacant units (see Table 1-3). Of the 221 housing units in Seldovia in 1990, only 129 or 58% are occupied. Yet, while 42% of the City's housing stock is vacant, a significant portion of these units (58) are not intended for year round residence, but, instead, are set aside for seasonal, recreational, or occasional use indicating a significant number of summer residents. Moreover, the market for owner-occupied housing is relatively tight - in 1990 only 2 units of 80 owner-occupied type units were vacant and for sale, representing 2.5% of the owner-occupied stock. However, this is not to underestimate Seldovia's housing vacancy problem; almost one-third (30.1%) of the City's 73 rental units were vacant in 1990, far above the vacancy rates for the Kenai Peninsula (13.9%) or the State (8.5%). Included in the City's rental stock are 18 public housing units in Cook Inlet Housing Authority's Lakeside Terrace that rent for an average $295 per month. Originally, these units were all to be set aside for senior citizens, but given relatively slack demand, four units have been reserved for eligible singles, singles with one child, or couples without children. The Housing Authority has attempted to rent vacant units to eligible elderly Anchorage residents; there is currently a waiting list in Anchorage for senior housing. However, the Authority has been unsuccessful, mostly, they believe, because of the relative isolation of Seldovia. Thus, there are currently three vacant units, comprising 16.7%, in the complex. Consistent with the lack of demand that high vacancies represent, persons per unit tend to be lower in Seldovia than elsewhere for both owner occupied and rental units. Seldovia's year round housing is almost evenly divided between units for owner occupancy and rental units. However, given the high vacancy rates for rentals, owner occupied units represent the bulk of the occupied units (of the 129 occupied units 78 or 60.5% are owner occupied). Seldovia's depressed housing demand is most clearly reflected in the low level of rents. The median 1990 monthly rent of $297 is 27% below the median rent for the Borough and BST Associates Page 35 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One 40% below the median for Alaska as a whole : ($503.) The value of Seldovia's owner-occupied units is also lower than that of the Borough's and the State's. | However, consistent with a healthier market, the difference is not as great as in the case of rentals. The 1990 median value of Seldovia's housing, $75,900, was about 10% below the median for Kenai Peninsula and about 20% less than the average for the State It should be noted that the availability of inexpensive housing, while perhaps currently a hardship for local property owners, may serve as an asset that Seldovia can use in attempting to lure economic development to the area. This is discussed in greater detail in Chapters 10 and 11. Table 1-3 Housing Characteristics of Seldovia and Other Areas - 1990 City of Kenai Seldovia Borough Alaska Total housing units 221 19,364 232,608 Year round units 162 16,52 Available for owner occupancy 80 10,092 110,983 Available for rent 5S 5311 90,630 Other 9 1,125 Seasonal units 59 2,836 Occupied housing units 129 14,250 188,915 Owner occupied 78 60.5% 9,677 105,989 Renter occupied 51 39.5% 4,573 82,926 43.9% Vacant housing units 92 41.6% 5,114 43,693 18.8% For Rent 22 738 7,704 For Sale 2 415 4,994 Seasonal/recr/occas use 58 2,819 16,991 Migrant Labor 1 17 Other 9 1,125 Homeowner vacancy rate 2.5% 4.1% 4.5% Rental vacancy rate 30.1% 13.9% 8.5% Persons per unit 2.45 2.79 2.80 Persons/owner-occupied unit 2.58 2.95 2.97 Persons/renter-occupied unit 225 2.45 2.58 UNITS IN STRUCTURE 221 19,364 l-unit, detached 138 13,256 124,185 1-unit, attached 3 174 15,963 2 to 4 units 15 1,718 30,358 5 to 9 units 1 631 16,171 10 or more units ZT 756 21,229 Mobile home, trailer, other 37 2,829 24,702 Source: 1990 Census, BST Associates BST Associates Page 36 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-3 (Continued) City of Kenai Seldovia Borough Alaska VALUE Specified owner-occupied units 53 71527 Less than 50,000 11 10989 50,000 to 99,000 29 31862 100,000 to 149,000 10 23012 150,000 to 199,999 2 7528 200,000 to 299,999 1 3210 300,000 or more 0 926 Median (dollars) 75,900 94,400 CONTRACT RENT Specified renter-occupied units paying cash rent 41 70579 Less than 250 13 5785 250 to 499 23 29167 500 to 749 5 23750 750 to 999 0 8455 1,000 or more 0 3422 Median (dollars) 297 503 RACE AND HISPANIC ORIGIN OF HOUSEHOLDER Occupied housing units 129 14250 188915 White 112 13274 153215 Black 0 42 6927 American Indian/Eskimo/Aleut 14 804 22305 Asian or Pacific Islander 2 97 4674 Other race 1 33 1794 Hispanic origin (of any race) 2 177 4671 Source: 1990 Census, BST Associates BST Associates Page 37 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One EMPLOYMENT Estimates of Seldovia's 1990 and 1991 non-agricultural employment have been developed using Alaska Department of Labor (ADOL) data. These data, in turn, have been adjusted by BST Associates to overcome underestimates due to problems in firms reporting employment location to the ADOL and reflect consistency with retail sales data. Employment estimates were created using retail sales per employee ratios for the City augmented by ratios for the Borough. Seldovia's estimated 1991 non-agricultural employment of 93 is concentrated in three sectors: trade, services, and government (see Table 1-4). In addition, there are estimated to be 50 or more fishermen who are not shown in table below. Table 1-4 Non-Agricultural Employment by Industry Seldovia 1988-91 Annual Average ADOL ADOL ADOL BST ADOL BST Change Industry 1988 1989 1990 1990 1991 1991 1988-1991(BST) Mining 0 0 0 0 0 0 0.0% Construction (D) (D) (D) 1 () 2) NA Manufacturing 0 0 0 2 0 1 0.0% TCU [1] 0 22 0 8 0 9 0.0% Trade 27 27 20 20 19 19 -11.0% FIRE [2] (D) (D) (D) 1 (D) 1 NA Services 16 23 25 25 32 24 14.5% Government 33 38 41 41 37 a7 3.9% Federal Dy 2 2 2 2 2 0.0% State 0 0 0 0 2 Z N/A Local 31 36 39 32 33 33 2.1% Total 80 12 91 98 OL 93 5.1% ( D) Dis not reported by ADOL to protect individual businesses [1] TCU is transportation, communications and utilities [2] FIRE is finance, insurance and real estate ADOL Alaska Department of Labor BST BST Associates Source: Alaska Department of Labor, Research & Analysis Division, BST Associates.. BST Associates Page 38 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One The one time appearance of the 22 employees in Seldovia's transportation, communication, and utilities sector in 1989 is due to the clean up of the Valdez oil spill. Trade, services and government accounted for 86% of the City's non-agricultural employment. Government is the largest sector, with 37 employees, the bulk of whom are teachers and other educational workers employed at the local school. As will be clear from the retail sales analysis, a significant portion of trade and_ service employment is dependent upon tourism. The employment situation has darkened recently with the closure of the John Cabot fish cannery in 1991. Total employment has non-agricultural/fishing jobs in 1989 to 93 in 1991. Seldovia represents 0.7% of the Kenai Peninsula Borough's employment, almost identical to its share of the Peninsula's population. Another source (the Alaska Department of Community & Regional Affairs) placed the employment in Seldovia at approximately 195 individuals in 1990, when the cannery was still operating. DCRA estimated that there were between 50 and 120 part and fulltime fishermen and between 47 and 51 employees at the cannery. The cannery has been a very important part of declined from an estimated 112 | the economy of the City of Seldovia. Table 1-5 Non-Agricultural Employment by Industry by Area Kenai Peninsula Borough 1991-2 * Seldovia as Kenai/ Rest of Kenai Percent of Industry Soldotna Homer Seward Borough Seldovia Borough Borough Mining 1,036 (D) (D) (D) 0 1,156 0.00% Construction 490 128 54 39 2 713 0.28% Manufacturing 1,310 414 334 7 1 2,066 0.05% TCU [1] 598 226 118 55 9 1,006 0.89% Trade 1,722 396 323 249. 19 2,709 0.70% FIRE [2] 176 (D) 21 (D) 1 277 0.36% Services 1,974 413 242 154 24 2,807 0.86% Government 1,966 529 587 279 37 3,398 1.09% Federal 150 63 48 26 2 289 0.69% State 529 98 369 53 2 1,051 0.19% Local 1,287 368 170 200 33 2,058 1.60% Total 2.272 2.256 1679 832 3 14.132 0.66% * After closure of the cannery [1] Transportation, Communications, and Utilities [2] Finance, Insurance, and Real Estate (D) Suppressed to avoid disclosure Source: Alaska Department Labor, Research and Analysis Division, BST Associates BST Associates Page 39 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-6 Total Employment by Industry by Area Kenai Peninsula Borough 1990 Sector Number Agriculture (fishing) 50-120 Construction 6 Finance 4 Government a Mining 0 Manufacturing/processing 47/51 Service 2 Trade 25 Transportation, Communications DS Other. 0 Total (average) 195 Source: Alaska Department of Community and Regional Affairs RETAIL SALES A review of taxable retail sales data offers a clear view into the workings of the Seldovia economy. Gross sales in Seldovia have been increasing slightly during the past two and three quarters years. In 1990, gross sales registered $4.1 million increasing to $4.7 million in 1991 and $4.3 million for the first three quarters of 1992. However, the percentage of gross sales that are taxable have been steadily declining, falling from 74% in 1990 to 55% in 1992. This could be partially explained by Alaskan tax statutes which limit taxes to sales below $500. Calender year 1992 taxable retail sales for Seldovia are estimated to be $2,909,234, down 1.7% from 1991 and 4.4% from 1990. These sales are concentrated in a small number Figure 1-3 Non-Ag Employment by Sector Seldovia and Kenai Peninsula Trade 20% FIRE 1% GOVT 40% Services 26% CON 2% Seldovia Trade 19% FIRE Services GOVT 20% 24% CON 5% Kenai Peninsula Source: State of Alaska BST Associates Page 40 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One of categories - about 97% of all 1992 sales were made in just three sectors: retail trade, services, and transportation, communications, and utilities (TCU). Retail trade sales form the majority of total taxable sales, being responsible for over six out of every ten sales dollars. Sales at the food store(s) and of fuel, in turn, comprise about 75% of retail trade retail sales. Services account for one-fifth of total retail sales and about half of this is attributable to Seldovia's lodging industry, which is composed of hotels, motels, and bed and breakfasts. TCU (telephone, communications and utilities) sales are almost entirely due to local purchase of electricity and telephone service. Taxable sales occur primarily in the second and third quarter which coincides with the tourist and fishing season. This is another indication of the city's dependence on these industries. Indeed, these two quarters generated 63% of the taxable sales in 1991 as compared with 18% for the first quarter and 19% for the fourth quarter. These data clearly show that Seldovia's economy depends to a very great extent on the visitor and fishing industries. FUTURE DEVELOPMENTS & SUMMARY Population projections, especially for smaller communities, are difficult to make. One event, such as the establishment of a new employment venture or the loss or reduction of an existing employment source may cause a noticeable fluctuation in population. Figure 1-4 Gross and Taxable Sales City of Seldovia $ (Millions) T42% 63.1% 65-3% $4.10 $4.69 $4.31 Y Lla_| a 1991 1992 Q1-3 VZZZZ2) Year MM Gross Sales Taxable Sales —*— % Taxable Source: Kenai Borough BST Associates Page 41 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Historically, an economy based on resource harvesting has supported nearly continual growth in Seldovia from 1880 to 1980. This very impressive, one hundred year record was broken in the years following 1980. Action at the local, regional, and state levels as well as increased stability in the commercial fishing industry is necessary to establish stability in the existing population as well as to insure future growth. At the local level, existing City projects that may have economic development benefits include encouraging and supporting tourism by providing and improving the RV Park; providing a series of informational and directional signs to assist tourists; and the completion of the dock and _ harbor improvements. Current proposed City projects include: acquiring funding for establishment of a boat haul-out facility, sewer and water system improvements, harbor fire protection improvements and dredging in the vicinity of the harbor and mouth of the slough. The city manager has also attended meetings of the Borough's Economic Development Task Force during which the formation of a shellfish growers cooperative capable of providing support in the areas of processing packaging, shipping, and marketing has been discussed. Seldovia Bay and other bays in the areas have tremendous potential to support shellfish aquaculture projects and expansion of this industry will bring economic benefits to the area. One additional project at the local level involves the improvement of five miles of local roads in the Barabara Heights subdivision. The improvements are scheduled for the fall of 1992 and may lead to the development or sale of additional lots for both residential and recreational purposes. At the regional level there are several projects and activities that have potential economic benefits for Seldovial. Once operational, the Paint River fish ladder project is anticipated to contribute and additional 1.7 million salmon to the area. Increased production from the Tutka Bay Hatchery should also increase the number of pink salmon available. The 1991 Tanner crab harvest exceeded the 1990 harvest by 100,000 pounds and Fish and Game, is considering reopening the dungeness crab fishery which was closed in 1991. The city manager is also a member of a task force that is looking into the possibility of revising the Borough's personal property tax system for the purpose of encouraging the basing of larger fishing vessels in the harbors located in the Borough, — including the Seldovia harbor. At the State level, improvements to, and expansion of the marine transportation system and expanded involvement in the promoting and marketing of salmon will benefit Seldovia. Seldovia is served by the State Ferry System and improved service, which may include year round service by 1995, will benefit the residents and will support expansion of tourism. According to an article in the January 15,1992, Anchorage Daily News, the Alaska Salmon Task Force has recommended the State invest an additional ten million dollars annually into the marketing of Alaskan fish. Along with existing and proposed projects and activities that may encourage future growth, the existing Seldovia population has the potential of also contributing to growth of the community. 1990 census figures show that approximately one third of the City's 1990 BST Associates Page 42 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One population are within child-bearing years and half the total households are made up of families. With this review of recent trends in mind, the following chapters evaluate the growth potential of a variety of business sectors. Figure 1-5 Taxable Sales by Quarter City of Seldovia Quarter se Qi $636 7 Q2 Q3 Lhd 626 es, $o $200 $400 $600 $800 $1,000 $1,200 Thousands Hl 1990 1991 1992 Q1-3 Source: Kenai Borough BST Associates Page 43 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One APPENDIX ADDITIONAL TABLES ie UU UU EEE EEE UE EIEIEI SEER EEEEREEE SEE BST Associates Page 44 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Comparison of Gross and Taxable Sales Table 1-7 in Seldovia and the Kenai Peninsula Borough Gross & Taxable Sales - Seldovia Year Category Ql Q2 Q3 Q4 Total 1990 Gross $726,203 $1,194,539 $1,330,195 $850,494 $4,101,431 1990 Taxable $553,222 $945,132 $1,018,885 $525,782 $3,043,021 Percent 76.2% 79.1% 76.6% 61.8% 74.2% 1991 Gross $864,533 $1,719,442 $1,291,802 $816,802 $4,692,579 1991 Taxable $535,635 $882,259 $978,212 $563,392 $2,959,498 Percent 62.0% 51.3% » 75.1% 69.0% 63.1% 1992 Gross $764,786 $1,085,110 $2,457,119 $907,683 $5,214,698 1992 Taxable $536,667 $816,865 $1,027,677 $559,889 $2,941,098 Percent 70.2% 75.3% 41.8% 61.7% 56.4% Gross & Taxable Sales - Kenai Peninsula Borough Year Category Ql Q2 Q3 Q4 Total 1990 Gross $247,182,146 $342,771,702 $411,145,156 $356,019,399 $1,357,118,403 1990 Taxable $82,322,028 $119,015,173 $134,254,402 $104,001,265 $439,592,868 Percent 33.3% 34.7% 32.7% 29.2% 32.4% 1991 Gross $253,926,852 $336,357,871 $397,071,656 $293,702,472 $1,281,058,851 1991 Taxable $86,343,341 $120,434,798 $139,063,390 $99,572,738 $445,414,267 Percent 34.0% 35.8% 35.0% 33.9% 34.8% 1992 Gross $237,777,453 $282,606,098 $410,583,112 $281,304,064 $1,212,270,727 1992 Taxable $85,726,742 $120,303,519 $144,910,081 $101,291,496 $452,231,838 Percent 36.1% 42.6% 35.3% 36.0% 37.3% Source: Kenai Peninsula Borough Finance Department, BST Associates BST Associates Page 45 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-8 Taxable Retail Sales Seldovia and the Kenai Peninsula Borough 1990-1992 % Change % Change % Change 1990 1991 1992 Seldovia Seldovia Seldovia 1990 1991 1992 SIC Seldovia Seldovia Seldovia 1990-1991 1991-1992 1990-1992 Kenai Boro Kenai Boro Kenai Boro Description 1Q-3Q A Agriculture Forestry & Fishing $43,114 $62,746 $2,587 45.5% 95.9% -94.0% $3,713,404 $3,399,631 $3,046,323 C Construction $12,319 $20,458 $14,917 66.1% -27.1% 21.1% $8,503,393 $7,965,424 $5,007,104 Ds Manufacturing $4,606 $1,735 $4,896 62.3% 182.2% 6.3% $6,812,662 $6,434,043 $4,656,528 E ___ Transportation & Public Util $360,736 $393,926 $386,955 9.2% -1.8% 1.3% $52,296,976 $54,978,835 $43,897,258 F Wholesale Trade $5,180 $8,525 $11,039 64.6% 29.5% 113.1% $13,288,355 $20,322,937 $10,215,227 G Retail Trade $2,002,402 $1,945,626 $1,841,645 2.8% -5.3% 8.0% $254,325,310 $251,270,772 $198,779,933 H Finance, Insurance, Real Estate $26,585 $38,650 $60,102 45.4% 55.5% 126.1% $13,623,317 $14,553,725 $12,031,314 I Services $588,079 $487,832 $587,093 -17.0% 20.3% 0.2% $78,801,395 $77,655,520 $68 439,037 Total $3,043,021 $2,959,498 $2,909,234 -2.7% -1.7% 4.4% $431,364,812 $436,580,887 $346,072,724 Source:Kenai Peninsula Borough Finance Office, BST Associates BST Associates Page 46 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-9 Population by Sex Seldovia Study Area 1990 All Male Female Area Persons Male Percent Female Percent Seldovia City 316 166 52.8% 149 47.2% Jackolof Bay 28 12 42.9% 15 57.1% 301 73 43 58.9% 30 41.1% 303 54 42 77.8% 12 22.2% 305 42 24 57.1% 18 42.9% 306 7 5 71.4% 2 28.6% 307 11 6 54.5% 8 45.5% 309 2 z 100.0% 0.0% 311 17 6 35.3% 11 64.7% 313 22 12 54.5% 10 45.5% 314 4 2 50.0% 2 50.0% 315 11 8 72.7% 3 27.3% 339 24 15 62.5% 9 37.5% 340 0.0% 0.0% 341 1 0.0% 1 100.0% 342 0.0% 0.0% 343 0.0% 0.0% Total 612 343 56.2% 268 43.8% Percent of Kenai Peninsula 1.5% 1.6% 14% Kenai Peninsula Borough 40,802 21,625 53.0% 19,176 47.0% Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates a BST Associates Page 47 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-10 Race American American Indian Indian Eskimo Other Hispanic Eskimo Other White or Aleut Race Area White or Aleut Race Percent Percent Percent Seldovia City 259 53 3 82.0% 16.8% 1.2% Jackolof Bay 28 0 0 100.0% 0.0% 0.0% 301 5! 22 0 69.9% 30.1% 0.0% 303 51 2 1 94.4% 3.7% 1.9% 305 20 22 0 47.6% 52.4% 0.0% 306 6 1 0 85.7% 14.3% 0.0% 307 11 0 100.0% 0.0% 0.0% 309 az 0 0.0% 100.0% 0.0% 311 16 6 0 94.1% 35.3% 0.0% 313 16 6 0 72.7% 27.3% 0.0% 314 4 0 100.0% 0.0% 0.0% 315 11 0 100.0% 0.0% 0.0% 339 23 1 0 95.8% 4.2% 0.0% 340 0 0.0% 0.0% 0.0% 341 1 0 100.0% 0.0% 0.0% 342 0 0.0% 0.0% 0.0% 343 0 0.0% 0.0% 0.0% Total 497 115 4 81.2% 18.8% 0.8% Percent of Kenai Peninsula 1.3% 3.9% 0.6% Kenai Peninsula Borough 37,089 2,937 715 90.9% 7.2% 1.9% Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates BST Associates Page 48 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-11 Age All Under 16 years 18 years 2l years 25to44 45to54 55to59 60to64 O65 years 85 years Persons Syears andover andover and over years years years years andover and over Seldovia City 316 a 232 223 215 97 45 15 18 32 6 Jackolof Bay 28 4 23 23 2 15 Z a 3 0 0 301 3 9 51 51 49 28 8 2 1 6 303 54 53 53 53 29 18 2 3 1 305 42 4 25 23 22 16 5 306 7 6 6 6 2 3 1 307 11 1 10 10 10 4 2 3 309 2 2 2 2 1 1 311 17 3 13 13 13 11 2 313 vo 18 17 17 5 11 314 4 2 2 2 2 315 11 8 7 7 4 1 2 339 22 22 15 1 2 3 340 341 1 1 1 1 1 342 343 Total 610 66 459 432 420 216 99 23 28 43 6 Percent 10.8% 75.2% 10.8% 68.9% 354% 16.2% 3.8% 4.6% 7.0% 1.0% Percent of Kenai Peninsula 1.7% 1.6% 1.6% 1.6% 1.4% 2.3% 1.7% 2.4% 2.1% TAX Kenai Peninsula Borough 40,802 3,795 28,724 27,406 26,061 15,510 4,280 1,387 1,181 2,015 81 Percent 9.3% 10.4% 67.2% 63.9% 38.0% 10.5% 3.4% 2.9% 4.9% 0.2% Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates ee BST Associates Page 49 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One All Under 16 years 18 years 2l years 25to44 45to54 55to59 60to64 65 years 85 years Persons S years andover andover and over years years years years andover and over Seldovia City 51.8% 34.8% 50.5% 51.6% 51.2% 44.9% 45.5% 65.2% 64.3% T44% 100.0% Jackolof Bay 4.6% 6.1% 5.0% 5.3% 5.5% 6.9% 2.0% 8.7% 10.7% 0.0% 0.0% 301 12.0% 13.6% 11.1% 11.8% 11.7% 13.0% 8.1% 8.7% 3.6% 14.0% 0.0% 303 8.9% 0.0% 11.5% 12.3% 12.6% 13.4% 18.2% 8.7% 10.7% 2.3% 0.0% 305 6.9% 6.1% 5.4% 5.3% 5.2% 7TA% 5.1% 0.0% 0.0% 0.0% 0.0% 306 1.1% 0.0% 1.3% 1.4% 1.4% 0.9% 3.0% 0.0% 0.0% 2.3% 0.0% 307 1.8% 1.5% 2.2% 2.3% 2.4% 1.9% 0.0% 8.7% 10.7% 0.0% 0.0% 309 0.3% 0.0% 0.4% 0.5% 0.5% 0.5% 1.0% 0.0% 0.0% 0.0% 0.0% 311 2.8% 45% 2.8% 3.0% 3.1% 5.1% 2.0% 0.0% 0.0% 0.0% 0.0% 313 3.6% 0.0% 3.9% 3.9% 4.0% 2.3% 11.1% 0.0% 0.0% 0.0% 0.0% 314 0.7% 0.0% 0.4% 0.5% 0.5% 0.9% 0.0% 0.0% 0.0% 0.0% 0.0% 315 1.8% 0.0% 1.7% 1.6% 1.7% 1.9% 1.0% 0.0% 0.0% 4.7% 0.0% 339 3.6% 33.3% 3.3% 0.2% 0.0% 0.9% 3.0% 0.0% 0.0% 0.0% 0.0% 340 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 341 0.2% 0.0% 0.2% 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% 2.3% 0.0% 342 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 343 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Percent 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates eee BST Associates Page 50 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-12 Households & Families Persons in All Family Persons per Persons per households households Households Household Family Seldovia City 316 129 67 2.45 4.72 Jackolof Bay 28 13 10 2.15 2.80 301 70 30 9 2.33 4.12 303 15 10 4 1.50 3.75 305 42 12 9 3.50 4.67 306 7 3 1 2.33 7.00 307 11 5 5 2.20 2.20 309 2 2 1.00 "! 311 17 8 = 2.13 3.40 313 22 9 a 2.44 3.14 314 4 1 1 4.00 4.00 315 11 4 3 21s 3.67 339 "! "NY 340 "! "! 341 1 1 1.00 1"! 342 Mt! "! 343 "! "! Total 546 227 129 241 4.23 Percent of Kenai Peninsula 14% 1.6% 1.3% Kenai Peninsula Borough 39,738 14,250 10,216 2.79 3.89 Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates ee BST Associates Page 51 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-13 Family Characteristics Female householder no husband present Married With couple Telated family Total children Seldovia City 54 8 6 Jackolof Bay 9 301 13 3 3 303 4 305 8 1 1 306 1 307 4 309 311 5 313 314 1 315 339 340 341 342 343 Total 102 12 10 0 Percent of Kenai Peninsula 1.2% 1.0% 1.0% Kenai Peninsula Borough 8,456 1,202 1,010 Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates BST Associates Page 52 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-14 Householders Living Alone 65 years and over Total Total Female Seldovia City 50 21 8 Jackolof Bay a 301 11 2 303 6 1 305 2 306 1 307 309 2 311 3 3 1 314 315 1 339 340 341 1 1 1 342 343 Total 81 25 9 Percent of Kenai Peninsula 2.6% 44% 2.7% Kenai Peninsula Borough 3,105 567 333 Source: US Department of Commerce, Compiled by Alaska Department of Labor, Research & Analysis, BST Associates ee BST Associates Page 53 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Comparison of Gross and Taxable Sales in the Kenai Peninsula Table 1-15 Gross Sales by Jurisdiction 1990 1Q 1990 2Q 1990 3Q 1990 4Q Totals Homer $27,291,681 $44,293,917 $47,098,545 $33,004,602 $151,688,745 Kenai $29,289,833 $42,124,782 $70,642,952 $38,578,848 $180,636,415 Seldovia $726,203 $1,194,539 $1,330,195 $850,494 $4,101,431 Seward $16,033,243 $28,316,868 $32,540,638 $19,035,322 $95,926,071 Soldotna $30,338,397 $40,651,116 $48,236,261 $39,868,571 $159,094,345 Other Areas $143,502,789 $186,190,480 $211,296,565 $224,681,562 $765,671,396 Totals $247,182,146 $342,771,702 $411,145,156 $356,019,399 — $1,357,118,403 Taxable Sales by Jurisdiction November 13, 1992 1990 1Q 1990 2Q 1990 3Q 1990 4Q Totals Homer $12,639,297 $23,081,218 $25,318,196 $15,400,376 $76,439,087 Kenai $18,248,041 $22,662,288 $26,074,055 $23,633,086 $90,617,470 Seldovia $553,222 $945,132 $1,018,885 $525,782 $3,043,021 Seward $7,139,394 $12,418,065 $14,422,459 $7,966,625 $41,946,543 Soldotna $18,532,535 $24,577,492 $28,108,870 $24,659,129 $95,878,026 Other Areas $25,209,539 $35,330,978 $39,311,937 $31,816,267 $131,668,721 Totals $82,322,028 $119,015,173 $134,254,402 $104,001,265 $439,592,868 Taxable/Gross Sales by Jurisdiction November 13, 1992 1990 1Q 1990 2Q 1990 3Q 1990 4Q Homer 46.3% 52.1% 53.8% 46.7% 50.4% Kenai 62.3% 53.8% 36.9% 61.3% 50.2% Seldovia 76.2% 79.1% 76.6% 61.8% 74.2% Seward 44.5% 43.9% 44.3% 41.9% 43.7% Soldotna 61.1% 60.5% 58.3% 61.9% 60.3% Other Areas 17.6% 19.0% 18.6% 14.2% 17.2% Totals 33.3% 34.7% 32.7% 29.2% 32.4% 1990 1Q 1990 2Q 1990 3Q 1990 4Q Homer $24,101,751 $40,739,048 $46,987,507 $27,440,513 $139,268,819 Kenai $30,180,876 $43,319,670 $65,233,838 $53,828,619 $192,563,003 Seldovia $864,533 $1,719,442 $1,291,802 $816,802 $4,692,579 Seward $16,099,489 $27,454,792 $28,953,571 $18,033,588 $90,541,440 Soldotna $31,969,376 $43,064,058 $51,155,569 $44,786,045 $170,975,048 Other Areas $150,710,827 $180,060,861 $203,449 ,369 $148,796,905 $683,017,962 Totals $253,926,852 $336,357,871 $397,071,656 $293,702,472 $1,281,058,851 BST Associates Page 54 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-15 (continued) 19911Q 1991 2Q 1991 3Q 1991 4Q Totals Homer $12,841,995 $22,074,347 $26,704,805 $14,707,242 $76,328,389 Kenai $19,573,068 $22,918,017 $26,033,894 $23,260,807 $91,785,786 Seldovia $535,635 $882,259 $978,212 $563,392 $2,959,498 Seward $7,090,142 $12,911,142 $15,575,187 $7,262,147 $42,838,618 Soldotna $18,607,049 $24,402,754 $28,535,876 $24,313,721 $95,859,400 Other Areas $27,695,452 $37,246,279 $41,235,416 $29,465,429 $135,642,576 Totals $86,343,341 $120,434,798 $139,063,390 $99,572,738 $445,414,267 Taxable/Gross Sales by Jurisdiction November 13, 1992 Homer 53.3% 54.2% 56.8% 53.6% 54.8% Kenai 64.9% 52.9% 39.9% 43.2% 47.7% Seldovia 62.0% 51.3% 75.7% 69.0% 63.1% Seward 44.0% 47.0% 53.8% 40.3% 47.3% Soldotna 58.2% 56.7% 55.8% 54.3% 56.1% Other Areas 18.4% 20.7% 20.3% 19.8% 19.9% Totals 34.0% 35.8% 35.0% 33.9% 34.8% 1992 1Q 1992 2Q 1992 3Q 1992 4Q est Totals Homer $22,904,301 $37,313,677 $45,466,735 $25,932,993 $131,617,706 Kenai $38,780,607 $49,057,465 $79,986,328 $65,115,477 $232,939,877 Seldovia $764,786 $1,085,110 $2,457,119 $907,683 $5,214,698 Seward $15,598,045 $23,713,881 $27,699,760 $16,666,624 $83,678,310 Soldotna $32,728,810 $42,995,149 $47,652,064 $43,787,683 $167,163,706 Other Areas $127,000,904 $128,440,816 $207,321,106 $128,893,601 $591,656,427 Totals $237,777,453 $282,606,098 $410,583,112 $281,304,064 $1,212,270,727 1992 1Q 1992 2Q 1992 3Q 1992 4Q est Totals Homer $12,588,603 $21,860,375 $26,369,593 $14,515,689 $75,334,260 Kenai $19,682,705 $24,523,729 $28,022,015 $24,517,950 $96,746,399 Seldovia $536,667 $816,865 $1,027,677 $559,889 $2,941,098 Seward $7,443,766 $12,830,171 $16,549,422 $7,516,671 $44,340,030 Soldotna $19,173,419 $24,419,121 $30,104,665 $25,044,884 $98,742,089 Other Areas $26,301,582 $35,853,258 $42,836,709 $29,136,411 $134,127,960 Totals $85,726,742 $120,303,519 $144,910,081 $101,291,496 $452,231,838 BST Associates Page 55 City of Seldovia Seldovia Economic Development/Tourism Study Chapter One Table 1-15 (continued) Taxable/Gross Sales by Jurisdiction November 13, 1992 Homer 55.0% 58.6% 58.0% 56.0% 57.2% Kenai 50.8% 50.0% 35.0% 37.7% 41.5% Seldovia 70.2% 75.3% 41.8% 61.7% 56.4% Seward 47.71% 54.1% 59.7% 45.1% 53.0% Soldotna 58.6% 56.8% 63.2% 57.2% 59.1% Other Areas 20.7% 27.9% 20.7% 22.6% 22.7% Totals 36.1% 42.6% 35.3% 36.0% 37.3% Source: Kenai Peninsula Borough Finance Department See BST Associates Page 56 City of Seldovia CHAPTER TWO SURVEY RESULTS Seldovia Economic Development/Tourism Study Chapter Two SURVEY RESULTS As part of the data collection process and as a means of gauging community and _ local business attitudes, BST Associates conducted two surveys in Seldovia: one of the business community and the second of Seldovia households. In the case of the household survey, questionnaires were included along with residential and business utility bills. Thirty-five of the 124 household questionnaires were returned, resulting in a response rate of 28%. The merchant survey response was of a lower magnitude, with only 14 of 81 survey instruments returned which is a response rate of 17%. However, many of the businesses that have licenses are currently inactive. In addition, the survey was conducted in the winter when some business owners and citizens are not present. As a consequence, the response rate is considered acceptable. Community Survey Household Characteristics Given the relative high return rate, the sample represented by the community survey respondents may be viewed as_ being representative of the community as a whole. As such, the survey provides important information on household characteristics and attitudes toward growth and development. The respondents' written comments added a qualitative dimension to the data. According to the survey, the average number of years that Seldovia residents have lived in the area: half of the respondents have lived in Seldovia for four years or less. The overwhelming majority of the respondents want to stay in Seldovia: 91.4% of the respondents were intent on remaining in the City. For those who did not wish to remain, their reasons for leaving centered around the weak economy and its poor prospects for growth. The surveys support the finding reported in the US Census that the population of Seldovia is relatively older than that of the Kenai Borough and the State of Alaska. Thus, 19% of the respondents were 55 years or older, which is nearly identical to the 20% recorded by the 1990 Census. The proportion of the Alaska's population 55 or over is 9%. The older Seldovia population reflects the attraction of the City as a place of retirement and the low level of economic growth that is incapable of — supporting significant in-migration of younger households. It may be noted that this close correspondence to the Census data serves to reinforce the reliability of the survey results. The surveys reports that of the population between 17 and 55 years of age, three-quarters are employed. Of those 55 and older, approximately 56% are employed. Fishing supports the largest proportion of Seldovia residents: close to 21% of respondents listed fisherman as __ their occupation. About 20% of those employed are professionals, while the third largest occupation category is the managers/business owners group with 14% of employed Seldovians. These percentages should be used the City is six years. However, there appears with some caution, however, since the to be a significant number of newcomers to | question elicited multiple responses. BST Associates Page 57 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two The survey indicated that many of the jobs held by residents are located in places outside the City. Without question, most residents would prefer to live and work in Seldovia, although the weak economy in many cases precludes this option. Judging from the surveys, household income tends to fall within a band between $5,000 to $49,000. The shopping pattern of residents as revealed by the survey offer no surprises, but underscores the need to develop the City's business community. Due to the small size of Seldovia's retail trade and services sectors, a little less than 74% of household shopping expenditures are made outside Seldovia. This is especially true for goods such as apparel, furniture and appliances, and parts (auto and boat) and services like banking. Catalogue purchases constitute the largest share of money spent on gifts and clothing, while the remaining outside purchases are made in other cities presumably including Homer, Kenai/Soldotna, and Anchorage. Those goods with the highest rate of local purchase (over 50% of household expenditures) are medical and dental treatment, accounting services, and liquor. Food away from home (ie. expenditures at restaurants) was purchased approximately 49% of the time at Seldovia restaurants. It is only when the City reaches a larger size, that it can offer goods and services in sufficient number to slow the retail leakage that is currently occurring. It is clear that the community's quality of life is the main reason why people like living in Seldovia as well as being the chief motivating factor associated with moving to the City. Indeed, the aesthetic aspect of the City, its attractive physical setting, was considered by respondents as the most important reason for selecting Seldovia as a place to live. The small town aspect of Seldovian life, the freedom from fear and other urban ills, as well as the personal freedom that people experience, was noted as the second most important reason for moving to the community. Residents consider these two aspects of the City as the best reasons for living in Seldovia as well. ©The maintenance of this high quality of life and the beauty and grandeur of the landscape should be a key guiding factor in devising an economic development strategy. Yet, while residents appreciate the good aspects of the community, the limitations inherent in the leakage of residents shopping expenditures to outlets away from Seldovia makes them desirous of a larger city. Overwhelmingly, respondents wished to see growth as opposed to the current situation or, even worse, a smaller community. There are strong feelings about the continued shrinkage of the City apparent from the fact that none of the respondents preferred Seldovia to be smaller than it is now. However, there is no consensus concerning ideal city size. Residents seem evenly divided among choices of populations in 100 people increments ranging from 500 to 1,000 or more. While there is no agreement on the end point of Seldovia's growth, inhabitants clearly want the rate of that growth to be slow. Although a few respondents indicated a preference for rapid population increase, the vast majority believe that slow (or moderate) development is the best option. Residents would also prefer to see permanent residents as opposed to seasonal or occasional inhabitants who do not consider Seldovia home. BST Associates Page 58 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two There is also a consensus about which industries Seldovians would like for their community. Commercial fishing and fish processing are the economic development options of choice, especially in the short run. Indeed, the preference for the cannery to be opened as early as possible was the strongest f all alternatives, about three times greater han the next most popular choice, commercial shing. Other water-related businesses such s boat repair and marine research were also looked upon with favor. There was also a ish to see arts & crafts and education-related dustries locate in town. Other desired types f business include auto repair/mechanics, anks, recreation (bowling alley and movie eater), and additional retail stores. ogging and mining were both consistently iewed in very negative terms. These were he industries that residents are least inclined oO see in or around their city. Tourism had relatively lukewarm support among citizens. It received a relatively low core when being considered for immediate onomic development, although this score tt tourism in the same category as sitive-image industries such as small boat air and negative industries like logging and ing. At the same time, it was ranked tively high among those industries idents would least like to see during the r future. Then too, in answer to a more neral question about economic development tions, tourism was placed in the lower half the preferred industry category among ining, light manufacturing, and lumber anufacturing. These responses are quite interesting, especially in light of the significant impact tourism has on the Seldovia economy. Merchants Survey The response to the survey from the business community was less extensive than the citizen responses; with only 14 out of 81 total merchant questionnaires being returned. Of those completed, most were from businesses connected in one form or another to the tourism sector. However, as noted above, several of the businesses that have business licenses are not currently active. merchant responses tended to be up-beat optimistic. Business was either better this r than last or, at worst, the same. Tourism hem is on the rise; day trip visitors have eased. They have plans to expand but they not feel supported by the City. The City is seen as deficient in a number of areas. There is a fear that the City is looking to the tourism sector as a source of revenues through tax increases. At the same time, the City is not seen as being supportive and proactive regarding improving the business climate and increasing business. They feel that Seldovia should do more to promote tourism in the area through producing fliers and brochures and distributing them in Kenai and Anchorage. The City and its park could also be better maintained. There should be financial incentives offered such as a tax moratorium (similar to that offered to the canneries in the past) and lower utility rates. Worst of all, however, is the negative atmosphere that permeates the community. Those with economic difficulties are envious of those who are more successful. There is resentment about tourism, with a (mistaken) feeling that only those directly involved in the sector benefit, ignoring the multiplier effect that tourism or any other basic industry has on the community at large. There is a belief that tourist industries do not employ enough people. This attitude acts to inhibit community support of the tourist sector. BST Associates Page 59 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Consumer Survey Responses Table 2-1 Years Lived in Seldovia Number of Years Frequency Percent 15 1 4.2% 6 10 41.7% 5 1 4.2% - 5 20.8% 3 4 16.7% 2 3 12.5% Total 24 Intend on Staying Frequency Percent Yes 32 91.4% No 0 0.0% No Answer 3 8.6% Total 35 Source : Survey of Citizens, BST Associates Comments : Will stay for 101 years Like summers - maybe I'll stay year round Will stay until I die Will stay 5-10 years Will stay 3 years Will stay at least 10+ years I'm here for good I will be leaving GO) SON Gy 8S) If leaving, reasons for leaving 1. Unfriendly climate, poor education for children 2. Poor Economic growth, city unwilling to help new business BST Associates Page 60 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-2 Employment/Unemployment Characteristics Number of Family Members by Age Category 17 17-55 55+ Total Total 19 48 16 83 Employed 15 12 36 % 78.9% 25.0% 56.3% 43.4% Unemployed 4 36 7 47 % 21.1% 75.0% 43.8% 56.6% Source : Survey of Citizens, BST Associates Table 2-3 Distribution of Jobs Job Category Male Female Total Percent Professional 9 5 14 19.7% Managers 2 5 10 14.1% Craftsmen 4 1 5 7.0% Machine Operators 2 2 2.8% Teachers 4 4 5.6% Service Workers 3 3 6 8.5% Fishermen 13 2 15 21.1% Laborers 1 3 4 5.6% Retired 5 1 6 8.5% Other 2 3 5 7.0% Total 48 23 71 Source : Survey of Citizens, BST Associates Note : Multiple choices were indicated by several respondents Comments : Several people would move to Seldovia if they had work We would both like to be working in Seldovia Manager of fish processing plant cannery & fish processing Airlines job Honest work - maybe w/wildlife fishers/nat. forestry There is no work in Seldovia AwPwne —— BST Associates Page 61 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-4 Comparison of Family Size and Income of Respondents Number of Family Members Income Group 1 2 3 4 5 6 7 ~~ Total Less than $5,000 1 1 1 2 1 6 16.7% $5,000 to $11,999 6 6 2 3 17 47.2% $12,000 to $19,999 1 1 2 1 1 6 16.7% $20,000 to $34,999 1 1 2 5.6% $35,000 to $49,999 2 1 3 8.3% More than $50,000 2 Z 5.6% Total 1 3 2 10 10 6 4 36 2.8% 8.3% 5.6% 27.8% 27.8% 16.7% 11.1% Source : Survey of Citizens, BST Associates Table 2-5 Reason for moving to Seldovia Work Family or Small Town Born in Available Friends Qualities Seldovia Aesthetic Other Very Important 10 6 14 5 19 5 Important 7 7 12 1 9 2 Neutral 4 5 4 5 4 3 Unimportant 4 4 1 Z 1 Very Unimportant 4 3 9 1 Score 15 9 39 -9 47 9 Source : Survey of Citizens, BST Associates BST Associates Page 62 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-6 What do you like most about living in Seldovia? Small town Aesthetic Work Family Qualities Beauty Available Friends Very Important 16 18 8 i Important 15 1 9 7 Neutral 0 3 a 4 Unimportant 0 0 0 0 Very Unimportant 0 0 i, 1 Score * 47 47 21 27 Source : Survey of Citizens, BST Associates * Explanation of Scores : Very Important = Two Points; Important = One Point ; Neutral = Zero Points; Unimportant = Minus One Point; Very Unimportant = Minus Two Points Other Comments : I. Remote yet close to road Z. Freedom of expression, freedom to leave door unlocked, freedom from fear ee BST Associates Page 63 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-7 Shopping Patterns of Seldovia Residents Percentage of Expenditures inside and outside Seldovia In Outside Category Seldovia Catalogue Seldovia Medical 52.6% 0.0% 474% 100.0% Accounting 51.0% 0.0% 49.0% 100.0% Dental 50.8% 0.0% 49.2% 100.0% Liquor 50.2% 0.0% 49.8% 100.0% Restaurant 49.3% 0.0% 50.7% 100.0% Movies 41.2% 21.1% 37.7% 100.0% Food 31.8% 10.5% 57.8% 100.0% Books 25.9% 30.3% 43.8% 100.0% Hardware 25.8% 20.7% 53.5% 100.0% Gifts 22.9% 40.2% 36.9% 100.0% Furniture 21.8% 18.8% 59.3% 100.0% Banking 17.5% 0.0% 82.5% 100.0% Autos 16.3% 33.6% 50.2% 100.0% Boats 15.3% 28.5% 56.3% 100.0% Auto parts 12.2% 19.5% 68.3% 100.0% Appliances 11.6% 28.0% 60.5% 100.0% Boat parts 7.9% 37.2% 54.9% 100.0% Clothing 6.7% 48.8% 44.5% 100.0% Shoes 0.0% 37.5% 62.5% 100.0% Average 26.9% 19.7% 53.4% 100.0% Source : Survey of Citizens, BST Associates —S_ BST Associates Page 64 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-8 Preferred Size of City Preference Less Current Greater Strongly Agree 0 5 14 Agree 1 3 10 Neutral 2 3 1 Disagree 8 7 0 Strongly Disagree 9 3 3 Score -25 0 32 Source : Survey of Citizens, BST Associates Table 2-9 If larger, how large? Population Size Responses Existing or less 400 500 600 700 900 1,000 or more BNWNAHN A Source : Survey of Citizens, BST Associates BST Associates Page 65 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-10 Preferred Types of Residents? Residents who do not make Present Permanent Seasonal their home Size Residents Residents in Seldovia Strongly Agree 3 19 5) 0 Agree 4 9 10 1 Neutral 4 2 4 7 Disagree 5 0 3 )) Strongly Disagree 8 0 3 10 Score -11 47 11 -24 Source : Survey of Citizens, BST Associates Table 2-11 Rate and type of expansion? No Rapid Slow Expansion Strongly Agree 6 9 0 Agree 5 8 0 Neutral 3 3 3 Disagree 9 2 4 Strongly Disagree 3 0 12 Score -2 24 -28 Source : Survey of Citizens, BST Associates BST Associates Page 66 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-12 What types of economic development would you prefer to see in Seldovia? Strongly Strongly Industry/Jobs Agree Agree Neutral Disagree Disagree Score Fishing i 24 6 0 0 0 54 Fish Processing 24 5 1 0 0 53 Boat Repair 19 9 7 0 0 47 Marine Research 17 9 5; 0 0 43 Arts & Crafts 13 17 0 0 0 43 Educational Jobs 16 10 2 0 0 42 Transportation 12 9 7 1 0 32 Manufacturing 8 15 6 0 0 31 Tourism (Overnighters) 11 11 4 1 3 26 Tourism (Daytrippers) 11 10 4 1 8 25 Cottage Industry 6 14 5 2 0 24 Mining 9 12 2 3 4 19 Lumber Manufacture /Logging 6 11 4 4 4 11 Source : Survey of Citizens, BST Associates Respondents would like to see : Cannery - 4 responses Auto repair and mechanics - 3 respondents Boat haul out - 2 respondents Marine repair shops along with parts stores. Something for recreation - like bowling alley. Banking facility Gas station, garage, gear shed, 1 more airlines, boat shop for repair, rental shop, appliance repair, bank Decent motel or hotel. Waterfront small shop business (like in Homer) More competition for food supplies rather than Homer Movie theater Second hand furniture/clothing store, hardware & outdoor sporting goods store/fresh vegetable & fruit hot house quansit hut Sewing materials, fishing supplies/rentals, outdoor supplies/rentals Tourist related - hiking- biking - skiing sport fishing. a BST Associates Page 67 ) City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-13 Which types of economic development would you most like to see in near future First Second Third Score Fish Processing 20 6 74 Commercial fishing 6 1 1 21 Tourism 5 13 Small Boat Repair 1 5 13 Marine research 2 10 Cottage Industry 1 2 1 8 Mining 1 5 7 Lumber z Zz 6 Educational Jobs 2 1 5 Arts & Crafts 3 3 Light Manufacturing 2 2 Source : Survey of Citizens, BST Associates Table 2-14 Which types of economic development would you least like to see in near future Least First Second Third Score Lumber/logging 6 4 26 Mining 4 4 1 21 Tourism 2 2 3 13 Cottage Industry 1 3 Marine research 1 3 Educational Jobs 1 2 Small Boat Repair 1 1 Source : Survey of Citizens, BST Associates BST Associates Page 68 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Merchants Survey Responses Table 2-15 Business climate Compared to last year Answer Frequency Percent Better 3 37.5% Worse 1 12.5% Same 3 37.5% Not Applicable 1 12.5% Total 6 Source : Survey of Merchants, BST Associates Comments : Le Seldovia does not have a business climate.. The town is not conducive to local business. My type depends on tourism - Locals shop for groceries, etc.) out of town because finances are so tight & prices here are high. I've closed the business this year. Haven't been inspired to continue production (which was always small). We are optimistic, tourism seems to be the one bright area. We carry mostly tourists but would like also to carry more goods for locals and working people. Logging or mining could actually benefit us that way but would detract from tourism. I get all the business I can handle. Day trip visitors increasing. Need to promote more long-term visitors through accommodation and activities, w trails, boat rentals, bike rentals, tours. People are less willing to spend BST Associates Page 69 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-16 Plans to increase or decrease business size. Answer Frequency Percent Increase 3 37.5% Decrease 0 0.0% Stay the same 5 62.5% Total 8 Source : Survey of Merchants, BST Associates Table 2-17 Importance of Tourism to Businesses Importance Day Trippers Overnighters Very Important 8 6 Moderately Important 1 Important 1 2 Not Important 3 8 Don't Know 1 Source : Survey of Merchants, BST Associates Table 2-18 Percentage of Business generated by tourism : Importance Frequency Percent 0 to 10% 5 37.5% 70% or more 9 64.3% Total 14 Source : Survey of Merchants, BST Associates BST Associates Page 70 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-19 How important are transportation costs to your business ? Response Frequency Percent Very Important 3 23.1% Moderately Important 4 30.8% Important 2 15.4% Not Important 4 30.8% Don't Know 0 0.0% Total 13 Source : Survey of Merchants, BST Associates Comments : 1. 10. 11. Boat & ferry fees from Homer help make the economy minded tourist make up mind as to coming over or not Because Seldovia is beyond the road system, the cost of a visitor to come to Seldovia is extremely high - so much so the visit is secondary for being in Alaska Cost of getting large items over here Added costs for services If it costs too much to travel to Seldovia fewer or no people will come to visit. That means fewer people staying @ my B&B or buying my work @ Synergy. I take trips myself to buy clay or materials from Anchorage. Most everything we use here is shipped in. This is why I buy much of my food & dry goods in Homer. It costs so much to get stuff to Seldovia. I can run my boat to Homer, shop & save enough to pay for my trip over and then some. If I keep my prices for transportation affordable people will continue to make Seldovia a destination. Their cost must be added to the cost of products. Increase cost of building materials All large or heavy items must be shipped by air (seldom by ferry). This additional charge adds somewhat to costs. BST Associates Page 71 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-20 How should transportation problems be solved? 1. Could charge harbor fees and have Seldovia owned boats doing some ferry services. 2. An intra bay ferry system subsidized by the state - justification: since Seldovia relies on accessibility to road system to support all industries 3. Year around ferry Among the tour boat & air carriers, competition helps keep fares down. For some years, I've begged our legislators to replace the Tustemena with a smaller vessel that would serve a smaller area, come to Seldovia more often, and that being smaller would not cost as much to operate. 5. Get a regular ferry which runs year around. 6. Alaska Marine Highway System should use a small feeder ferry & make 3-4 trips per week between Homer & Seldovia. I doubt costs would go down but service could sure improve. 7. Don't add any additional cost to folks coming to Seldovia 8. Unless the population were great enough to warrant competition in the freight area, costs will stay the same or increase. 9. Itis a fact of life. Not much one can do. 10. Seldovia needs regular transportation by water. If we could count on once or twice a week ferry service, it would be a start. See BST Associates Page 72 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two Table 2-21 What new businesses would you like most to see in the town? . Visitor Businesses - Local Manufacture Ww Boats out of the water i.e. lift paint shop welding shop gear shop storage steam cleaning laundry & showers grocery store to compete with Stampers fishing, tourism, recreation, etc. Marine research & education center, bank, boat repair and building service industries (which could not make it here) i.e. repairmen etc. NAM Ss I would like to see the cannery re-open. This would help many low-middle income people who need it most and give high school kids all a job or part-time job. Tourism could be promoted more, not much is spent or available to spend on advertisement or promotion of Seldovia. Opportunities are missed. | 9. value added seafood 10. A quality, clean spot providing good entertainment or atmosphere - something to spend $ on at night 11. Service personnel 12. More art galleries. More tourism oriented activities from accommodations to rentals of | , ere Table 2-22 What new businesses would you like least to see in the town? 1. no new restaurants. There are already 3 restaurants struggling to make it. No street food venders. No more bars. Anything new is helpful More bars, video stores, convenience stores Any new business would be welcome, except for a gambling casino or another bar. wrk wn I realize that a chrome mine or logging operation would bring jobs, but these would be short term. I do not want to see the country torn up, i.e. by mining open-pit or large scale logging. mining/cruise ships/logging timber a2 9. bars BST Associates Page 73 City of Seldovia Seldovia Economic Development/Tourism Study . Chapter Two Table 2-23 What can the City do to help new businesses? 1. Educate present population as to how tourism benefits whole community through jobs and taxes. Seminars on entrepreneurism. 2. Need to promote Seldovia as a place to establish a business and visit 4. City should encourage new business by serious consideration to proposals. i.e., The boat lift would have been in privately years ago if the city had not turned down the proposal. The city should encourage re-opening of John Cabot plant. 5. Be flexible on zoning changes, if required to accommodate a new business. 6. Locally - bring in speakers or seminars on how to start, what works best. Co-operative marketing, local public relations 7. Same as #20 plus anything - including tax forgiveness to get the cannery open again. 8. Do not tax them to death. Be more encouraging and less obstinate. BST Associates Page 74 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Two 10. 11 14. 15: 16. Table 2-24 What can the City do to help existing businesses? Promote Seldovia for what it is, keep the town clean and parks maintained. See that brochure is updated and better distributed in Kenai & Anchorage. Attract more businesses Cut utility costs. Change their attitude! People in this town who aren't making money are envious of those who are. As the City loses revenues it looks to businesses to ante up the difference with new taxes and fees, when instead they should be demanding better productivity from City workers, cutting expenses, and going out and promoting Seldovia and attracting new businesses. In years passed, the city gave several year tax moratoriums to the canneries to encourage development & continuity. City could be more realistic about utility charges to business like B & Bs. City should encourage new business by serious consideration to proposals. (i.e. The boat lift would have been in privately years ago, if the City had not turned down the proposal.) The City should encourage re-opening of John Cabot plant through bill forgiveness or tax moratorium, because if it doesn't open, they won't get the $ anyway. (Don't kill golden goose.) Do not raise taxes further.Get the vacant city lots in use for pot storage if a fisherman can keep it leased. Provide suitable infrastructure such as good roads, sewer, water Work with Chamber and local businesses serving tourism to support growth and jobs. Beyond money incentives, i.e. utilities cost breaks attracting more residence is it. Do not be as antagonistic towards local businesses . work together 12; 13, Tax incentives, loans promotions such as flyers & brochures. Create a business friendly atmosphere rather than a tax driven atmosphere. The expanded businesses will expand the tax base. If the city wants to remain in the tax collection business & have anyone (at all) to collect from, it is imperative to create a healthy climate for business. I know there is a new "laundromat-soda fountain" coming to town. I sincerely hope. Promote Seldovia as a place to visit. Keep the hotel, lodges & B&Bs full. Only if they cooperate in all community efforts. Don't encourage like business - or competitors. Seldovia needs more gift shops - charters - B & B - quality night spot. BST Associates Page 75 i City of Seldovia Seldovia Economic Development/Tourism Study J Chapter Two Table 2-25 Other Comments 1. Seldovia seems to be changing and permanent residents on decline so it would seem we need to promote tourism and other long term business such as Fish cannery. 2. City needs to change its attitude to how can we attract more businesses - additional industry will give bigger tax base. 3. Tourism is fine but only the Bed & Breakfast reap any money. We need the cannery to be in operation - businesses that would employ people. 4. I don't think its healthy. Listening to people talk, there is not a good feeling about the "city". There's a lack of trust & low expectations. Perhaps it is undeserved, but it is there, & hinders further investment or planning. It even affects participation in the Chamber of Commerce. 5. none Tax incentives, loans promotions such as flyers & brochures. 7. Create a business friendly atmosphere rather than a tax driven atmosphere. The expanded businesses will expand the tax base. 8. When the economy improves, i.e. jobs, there should be some improvement for business. Otherwise, it's back to population. 9. The business climate in the summer is great. The rest of the year leaves a great deal to be desired. a BST Associates Page 76 City of Seldovia CHAPTER THREE COMMUNITY RESOURCES Seldovia Economic Development/Tourism Study Chapter Three COMMUNITY RESOURCES One of the major goals of this study is to LOCAL GOVERNMENT evaluate the existing resources in the City of Seldovia that are underutilized. These community resources provide the basis upon which development can occur. They include the historical background of Seldovia, the vacant buildings in the downtown core and other assets such as the small boat harbor. These resources are evaluated in the following chapter. Much of the material presented below comes from local sources. LOCATION & ACCESS Seldovia is located near the southern tip of the Kenai Peninsula on Seldovia Bay which is part of the larger Kachemak Bay. The shores of Seldovia and Kachemak Bays are a striking contrast to the mountains rising to 2500 feet in elevation located southeast and west of the City. The dense stands of spruce and hemlock trees surrounding the community also add to the visual beauty of the area. Kachemak Bay prevents Seldovia from being connected to the road system serving the Kenai Peninsula. Access to the community is provided by boat and air. Homer is approximately 16 air miles from the community while Anchorage is approximately 130 air miles to the north. Seldovia is also served by the AlaskaState Ferry System. Seldovia is subject to two layers of municipal governance: a city government and a borough government, both formed under State law. Seldovia initially incorporated as a second class city under territorial law in 1945. The City was later reclassified to a first class city under State law in 1962. Seldovia has adopted the council-manager form of government. The manager is responsible for administering the day-to-day operations of the City and for carrying out policy established by the city council. The mayor is elected by the residents to a three year term. The mayor participates in city council meetings, but only votes to break a tie. A six member city council, that meets the second and fourth Wednesday of each month, is responsible for legislative, budget, and policy decisions. The City currently provides a variety of services. and facilities. | Services include: police, fire, emergency medical, sewer, water, storm drainage, maintenance of parks and public facilities, harbor and marine support, snow removal, street maintenance, building inspection, and animal control. Facilities include: harbor, dock, fuel dock, and a multi-purpose building that contains public safety, medical, library, meeting room, and city office space, and parks. Additional city facilities include its harbor support building. The Kenai Peninsula Borough, which is classified as a second class borough, incorporated in 1964. The Borough has a 2% BST Associates Page 77 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three general sales tax, and also taxes real and personal property. Area wide services include solid waste disposal, education, planning, emergency management, and limited economic development. MUNICIPAL BOUNDARIES The original Seldovia municipal boundaries encompassing 273.9 acres were established in 1945 when the City first incorporated. Based on the original description, it appears the boundaries included the 214 acre federal townsite plus an additional 59 acres. A 7.9 acre annexation approved in November 1991, increased the area within the boundaries to 281.8 acres. According to Kenai Peninsula Borough tax assessments records, there a total of 472 surveyed lots within the municipal boundaries. Of the 472 lots, 121 contain residential structures; 14 contain recreational structures; 11 contain mobile homes; 1 contains an apartment building; 30 contain accessory buildings; 24 are used for commercial purposes; | is used for industrial purposes; 2 contain churches; one contains the school; 2 contain institutional type buildings and the remainder are vacant. Within the City, developability of a good portion of the vacant lots is limited by steep slopes, shallow soils, and shallow water table. The 1980 Seldovia Comprehensive Plan identified only 27 acres of buildable vacant land within the City. Construction during the last ten years has reduced the number of developable lots. The area within a city's municipal boundaries is important because the boundaries establish the limits of a city's legislative jurisdiction, subject to certain exceptions. Title 29 of the Alaska State Statutes identifies the powers and responsibilities of municipalities. These powers and responsibilities include: planning for and managing community growth, taxation, owning land and facilities, encouraging and supporting economic development, and providing services that benefit the residents. Until November of 1991, when 7.9 acres was annexed to the City, Seldovia retained the same municipal boundaries since 1945. Thus, Seldovia's area has limited its ability to benefit from growth and expansion through enhanced revenue generating opportunities. Seldovia's limited ability to benefit from growth, development, and revenue generating Opportunities is exacerbated by the development activities occurring in the vicinity, but outside the Municipal boundaries. According to Kenai Peninsula Borough tax assessment records, there are 477 surveyed lots and tracts within the study area but outside the Seldovia municipal boundaries. Of the 477 lots: 19 contain recreational structures, 4 contain mobile homes, 33 contain residential structures, 2 are used for commercial purposes, 17 contain accessory type buildings, 1 lot contains a church, and the remainder are vacant. Lots are most likely vacant because owners have not yet started construction, lots have not yet been sold or leased, or, physical conditions such as slope or soils are unsuitable for development. Although the developed lots identified in the paragraph are located outside the City, the City is the base of local transportation, education, business, and support services for the occupants. BST Associates Page 78 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three HISTORY Although the area surrounding Seldovia has supported people for a much longer period of time, the evolution of the City over the last 110 years is a true Alaskan story. During this time period, Seldovia has experienced the peaks and valleys of growth and development. The following summarizes some of the major events experienced by Seldovia. The 1880 census identified Seldovia's population at 74. Ten years later the 1890 census showed an increase in population to 99 residents. During the 1890's several structures were built that contributed to the permanency of the community. Two trading posts and a U.S. Post Office were built, and the community's first school was established in 1896. During the 1800's, the fur trade was the primary economic activity in Seldovia and the Cook Inlet area. Residents hunted and traded the furs at the local trading posts. Also, Cook Inlet was the center of a trade network that extended from the interior to the coastal areas of southwest Alaska. As the fur industry declined in the early 1900's, it was replaced by the Cook Inlet fishing industry. As the fishing industry prospered, more people were attracted to the area and the economy evolved from a trade and barter system to one that was more cash-based. The first salmon cannery was built in Seldovia in 1910. A territorial public school was built in the community in 1914. Ten years later there were four canneries as well as floating saltery ships. In 1920 a herring boom and the introduction of fur farming resulted in a jump in population to 258. Ten years later, the 1930 census showed a population of 379 people. The census figure only included permanent residents and did not cover the large numbers of seasonal fishermen and cannery workers that came to Seldovia in search of work. This increase in population was followed by the construction of a variety of new buildings: shops, two hotels, cafes, bars, a pool hall, and several stores. To connect all the buildings, a boardwalk, which became the trademark of the community, was built on pilings over the waters of Seldovia Bay. During this boom, a jail was also built and a U.S. Marshall was assigned to the community. As the herring boom and fur farming declined in the 1930's, commercial salmon fishing became Seldovia's economic base. US. census figures show the population ranged from a low of 410 to a high of 460. In 1945, Seldovia incorporated as a city under territorial law. Currently the City is classified as a first-class city with a city manager form of government. During the early 1960's, the decline of the commercial salmon industry was followed by the development of the king crab fishery. This new fishery provided continued economic support for Seldovia's fishing-based economy. The 1964 earthquake was the next major event in the community's history. The City survived the quake, but the subsidence of the land mass resulted in the community being subject to flooding during periodic high tides. To remedy the problem, the federal government sponsored a major urban renewal project. The buildings and boardwalk were removed, the area was filled to increase the elevation, a new subdivision was established, and a small boat harbor was built. The urban BST Associates Page 79 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three renewal project generated which included both commercial buildings. some building residential and Negative impacts resulting from the earthquake and the changes that followed included the loss of three of the four salmon canneries and a temporary loss in population. Following the impacts attributed to the earthquake, Seldovia rebounded between 1970 and 1980. In 1970 the population reached 437 and peaked at 479 in 1980. This rebound was supported by opportunities in crab and shrimp fishing and processing, tourism, logging and the opening of a sawmill at Jakolof Bay. Following a peak in 1980, the City experienced a decline in population mainly resulting from a loss of employment opportunities. | The decline in population continued through the 1980's and is reflected in a 1990 census figure of 316. Seldovia, first settled by the Russians around 1800, is one of the oldest settlements in the Cook Inlet area. It is located in the sheltered harbor and sunny slopes of Seldovia Bay, just down from the Indian Village which flourished at the mouth of the Seldovia River many years ago. Eight miles South of the corporate limits of the city, English explorer Captain Nathaniel Portlock discovered what may have been the first coal mine in Alaska. It was mined by the Russians for their settlements and the Russian fleet. Most of the Russians left the area following the purchase of Alaska by the United States in 1867. Named "A(aliv) Seldevoy", meaning, "Herring Bay," by Russian Captain Tebenkov, the Kenai Indian name for the bay was "Chesloknu." In 1922 there was an abundance of herring in the area and several herring canneries were built, but this boom was shortlived Over the years, the processing of crab and salmon have been important. The first salmon cannery was built about 1910, and after World War I, more than fifty fox farms were established in the bays and coves of the peninsula. Many of them used Seldovia as the point of supply. During these years Seldovia was the commerce center for Western Alaska. During the 1964 earthquake, the land mass in downtown Seldovia dropped approximately four feet. Homes along the waterfront and the old Seldovia boardwalk were flooded at high tide. Urban Renewal funds were used to remove these structures and fill the land in preparation for new homes and businesses. A section of the old Seldovia boardwalk remains at the South end of town along the Slough. The history of Seldovia is one of its best features. The following historical profile comes from Jack English, district magistrate of Seldovia in 1964 : "Seldovia is one of the oldest settlements in the Cook Inlet area of Alaska, having been first settled by the Russians before the acquisition of Alaska by the United States. It is situated in a recognized mineral area of long standing. Just eight miles south of the corporate limits of the city the Russians opened what may well be the first coal mine in Alaska. This mine was discovered by a Russian explorer by the name of Portlock in 1780, and was mined by the Russians for some years for their settlements and also the Russian fleet. In 1900 the property was located by a Mr. L. C. Whorf and title was secured by him in 1913. During the Whorf operation coal BST Associates Page 80 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three was used locally and some shipped to Seward and Valdez from this mine. "Approximately ten miles north of the city there is a large chromite deposit of very high grade that has been worked in recent years, and is still in an operating condition. The Seldovia Chromite Co. have a deposit between this mine and the city, that could be operated if a road were available, at a very reasonable cost. "Seldovia is geographically located on Seldovia Bay, a small protected harbor (ice free the year round) and opening to the North onto Kachemak Bay, on the southerly end of Cook Inlet. Kachemak Bay in turn, lies on the southwestern shore of Kenai Peninsula, Alaska. Seldovia lies at approximately 59 degrees 27 minutes North latitude and 151 degrees 44 minutes West longitude. At the present time the incorporated town of Seldovia embraces within its corporate limits an area of some 250 acres of usable land. "Seldovia has been an __ incorporated community under the laws of the Territory of Alaska since 1936, until very recently the only incorporated community within this trade area. At the present time the City government consists of a Common Council and some appointive officers such as Chief of Police and City Clerk. "The earliest known use of Seldovia was by the Russians as a yearround harbor, a source of lumber and timber for the repairs of vessels and the building of shelters and houses for the crews that were engaged in the procuring and processing of large quantities of fish and other seafood, and limited amounts of fur and minerals. It has been reported that the Russians also made use of the limestone deposits that are evident by high white cliffs just at the entrance to Seldovia Bay, just outside the Seldovia city limits. "Located in the town at this time are some 225 residences, 23 business establishments and 3 canneries. There are approximately 500 people living in Seldovia; however this population is swelled a great deal in the summer owing to the influx of cannery workers and fishermen who move here with their families. The population outside the corporate limits, but in the immediate vicinity is not known definitely but would be approximately 200 people. While some miles up the bay from the city there are some 18 families living, that must use Seldovia as their source of supply. "The sole support of the City of Seldovia is derived from the fishing and _ seafood processing industries, and the seafood processing industries provide and outlet for the fisherman's catch. There has been a steady increase in the tons of canned fish products shipped from Seldovia each year. Present annual tonnage approximates 4,000 tons of seafood processed, with a wholesale value of approximately $3,000,000. "Work was begun in 1963 on the improvement and upgrading of the water supply and distribution system. Construction was completed in 1964 at a total cost of approximately $175,000. This project greatly improved the water system and provided adequate fire flow for industrial requirements and fire protection. "The March 27, 1964 earthquake caused a general land subsidence of about 3 1/2 feet in Seldovia. This caused a general flooding at high tide of the waterfront, including flooding of many homes, business establishments, and canneries, Plans to rehabilitate the waterfront BST Associates Page 81 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three are now being made through the Urban Renewal Authority, in conjunction with the Alaska State Housing Authority and the V.S. Army Engineer District, Alaska. Plans are to fill in the waterfront to an elevation of 30' south of the breakwater and to an elevation of 32' north of the breakwater. A 24' wide paved road is planned for the total length of the waterfront. The total construction cost for the URA Project is approximately 3 million dollars. "The appraised valuation of the property in the city is about $2,800,000 When the Urban Renewal Project is completed the evaluation should materially increase over the present value. "The city taxes on 100% of this valuation at the rate of ten mills, and the Borough tax is expected to be approximately ten mills on 100% valuation. The city also has a 2% sales tax in lieu of a personal property tax. "There is no sewage collection or disposal system in the City of Seldovia at the present. Sewage is disposed of by means of outfall lines leading to the beach, or by septic tanks and cesspools for the homes located away from the waterfront or the slough. Wakefield Fisheries normally disposes of their waste by barging out to sea, but many times the scows fill up and the wastes overflow into the water adjacent to the cannery. The other canneries dump all wastes onto the beaches adjacent to the canneries. "Seldovia has a great potential as a tourist and sportsman center. Air travel between Seldovia and Homer is on a daily basis with scheduled daily flights by Cordova Airlines and charter flights by Cook Inlet Aviation. A new 16 unit motel, bar, and restaurant is planned for early 1965 construction. An adequate sewage disposal system is extremely important in the tourist industry for both health and aesthetic reasons." [Source document is unknown] BST Associates Page 82 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three General Information about Seldovia Weather: Seldovia's location on the South side of Kachemak Bay qualifies it to be know as the "Banana Belt" of the Kenai Peninsula. Temperatures seldom drop below 22 degrees F. during the winter. The average annual rainfall is approximately 31 inches and the prevailing wind is from the Southwest. SELDOVIA AN ALASKA COMMUNITY PROFILE Prepared by the Alaska Department of Commerce and Economic Development Location: Seldovia is on the Kenai Peninsula across Kachemak Bay from Homer in Southcentral Alaska. Flight time to Homer is 12 minutes, 45 minutes to Anchorage, 4 hours to Juneau, and 4 hours 30 minutes to Seattle. Transportation: Rail: None Air: Direct service Anchorage-Seldovia, Southcentral Air, Seldovia-Homer, Homer Air, Homer-Anchorage ERA and Markair. Water: Alaska Marine Highway System of ferries connects to Homer, where the Sterling Highway goes to Anchorage. Private ferry daily from Homer Spit during the Summer season. Foot traffic only - Rainbow Tours. Bus/Taxi/Rental Cars: Taxi available. Industrial Sites Available: Inside City Limits: Size/Zoning: 2 acres of waterfront property zoned industrial Percent Vacant: 10% Size Lots Available 1/4 to 2 acres, according to need Price Range: Prices available from the City of Seldovia Description: Terrain is above mean high tide; drainage good; sub-soil is gravel; no piling or fill required Outside City Limits: Extensive industrial acreage available; contact Kenai Peninsula Borough Economic Development Office BST Associates Page 83 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Utilities: Water: Supplier: City of Seldovia Rates: Residential: $26/month Commercial: Retail Establishments $30/month Restaurants $75/month Motel/Hotel/Bed & Breakfast $26/month plus $6 for each additional unit Industrial: Canneries $2,063.10/month flat rate or by meter. (If meter following meter rates shall apply: First 30,000 gallons $1.78/thousand gallons Next 90,000 gallons $1.46/thousand gallons Next 270,000 gallons $1.20/thousand gallons Over 390,000 gallons $ .93/thousand gallons Sale of water at the dock or from any other City facility = $10/thousand gallons Size of mains 12 inches Source: 2 Reservoirs Consumption: 275,000 gallons daily average Capacity: 1,750,000 gal plus 500,000 gallon storage tank Treatment Method: Chlorination and Filtration Sewer: Supplier City of Seldovia Rates Residential Single family dwelling $26/month Multiple dwelling first unit $26/month Multiple dwelling each additional $15/month Commercial Restaurant $ 26/month motel/hotel/Bed & Breakfast $ 26/month plus $6 for each additional unit Cannery $275/month Line size 10-12 inches Treatment Method: Primary Garbage Service: Supplier: Hopkins Brothers Inc. Rates: $26.93/quarterly Disposal Method Sanitary Landfill Electricity: Supplier: Homer Electric Association Rates: Residential $11 customer charge for every billing period first 600 kWh @ $.09531 over 600 kWh @ $.10232 Commercial $40 customer charge for every billing period first 3,000 kWh @ $.09235 per kWh over 3,000 kWh @ $.08036 per kWh Over 100 KW @ $6.36860 per KW BST Associates Page 84 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Communications: Telephone: Supplier: Rates: Residential Business MEDIA: Pacific Telecom Inc. $16.30 monthly charge $ 3.50 Federal Access - Single Line $ .28 universal surcharge $26.05 monthly charge $ 3.50 Federal Access - Single Line $ 6.00 Federal Access - Multi Line $ .28 Universal Surcharge - Single Line $ .56 Universal Surcharge - Multi Line Newspapers: Homer News, Peninsula Clarion, Anchorage Daily News Television: Anchorage television stations Radio: Kenai Peninsula and Anchorage radio stations. CLIMATE: Average Temperatures Period Minimum January 11.9 July 51.6 Annual 34.0 Average Annual Precipitation: Elevation: Sea level to 300 feet Prevailing Wind: Southwest Mean Hourly Speed: 5-10 mph GOVERNMENT/TAXATION Mean Maximum Led, 2M 54.4 57.4 41.0 48.0 34.5 inches The City of Seldovia is a first-class city with a CouncilManager form of government. It is located within the Kenai Peninsula Borough, a second class Borough with a Mayor-Assembly form of government. Taxes City: Sales Tax: 3% Property Tax and Assessed Value Real: 7.75 Mills, $14,456,800.00 Personal: 7.75 Mills, $ 5,669,900.00 Borough: Sales Tax: 2% Property Tax and Assessed Value: Real: 8.55 Mills, $2,222,588,709.00 Personal: 7.75 Mills, $316,632,54.00 BST Associates Page 85 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Police Department: 2 officers Fire Department: Paid employee, volunteers, 1 pumper, ambulance, EMTs Court System: Located in Homer Insurance Classification: 8 COMMUNITY FACILITIES: Education: Classrooms: Pupils: Teachers: Elementary (K-6) *60 = High School (7-12) *30 — * School serving grades K-12 , separate vocational education accommodations, gymnasium and swimming pool. ** 8 full- time teachers and 2 tutors on staff. Health Care: The City of Seldovia provides a community clinic, complete with operating room and X-ray capability, 1 doctor is in residence and a dentist and optometrist make periodic visits. Recreation: City park and campground, RV park, small boat harbor, hunting, fishing, ice skating, hiking, beach-combing and clamming. Accommodations: Annie McKenzie's Boardwalk Hotel, Harmony Point Lodge, Seldovia Lodge and Stamper's Bayview Lodge. Numerous bed and breakfasts. General: 5 churches and a public library with approximately 10,000 volumes COST OF LIVING: Costs at Home as of September 1992: Source: Cooperative Extension Service Minimum Costs for Food at Home per Week: %U.S. Average 137 Family of 2 (20-50 yrs) $ 83.54 Family of 2 (51 & over) $ 80.97 Family of 4 with preschool children $101.71 Family of 4 with elementary school children $ 129.00 Other Costs: (Also see Utilities section) Heating oil per gallon Gasoline, unleaded per gallon.. $ 1.36 gal. first 400 gal., delivered $ 1.55 gal Housing: Residential and recreational sites are available for sale or lease near the community; contact local realtor or Seldovia Native Association. BST Associates Page 86 City of Seldovia Seldovia Economic Developmenv/Tourism Study Chapter Three Rentals: Apartments: 1 bedroom apartment............... $ 300 +/month 2 bedroom apartment............... $ 350 +/month Houses: 1-2 bedroom house................. $ 400 +/month 3+ bedroom house.................. $ 450 +/month Home Sales: 1-2 bedroom house.. 3+ bedroom house... $ 30,000.00 + $ 70,000.00 + FURTHER INFORMATION: City of Seldovia, P.O. Drawer B, Seldovia, AK 99663 (907)234-7643 Seldovia Chamber of Commerce, P.O. Drawer F, Seldovia, AK 99663 Kenai Peninsula Borough Economic Development District, 110 S. Willow, Suite 106, Kenai, AK 99611-7744 (907) 283-3335 Alaskan Department of Commerce and Economic Development, Division of Business Development, P.O. Box 110804, Juneau, AK 99811-0804 i a I NR BST Associates Page 87 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three SELDOVIA INFORMATION FROM INDIAN HEALTH SERVICE A. Description: 1. Location: Seldovia is located on the Kenai Peninsula approximately 16 miles from Homer across Kachemak Bay in Southcentral Alaska. The city is in Township 8 5, Range 14 W, Seward Meridian, at coordinates 59 degrees 27 minutes latitude, 151 degrees, 42 minutes longitude. 2. Climate: The Kenai Peninsula is influenced by three climatic Zones and Seldovia borders the Transitional and Marine Climatic Zones. The mean January temperature is 19.2 degrees F and the mean July temperature is 55.1 degrees F. The mean annual temperature is 39.5 degrees F. The area has 35.67 inches of mean annual precipitation which includes 107.1 inches of mean annual snowfall. 3. Geology and Topography: The geological formation of the Kenai Peninsula area is a combination of the Kenai-Chugach Mountains, with their backbone of glaciers and ice fields, and glacial and alluvial deposits. The area is underlain by sedimentary deposits. Glacial drift and outwash cover the entire area. Seldovia lays along the beach of Seldovia Bay and the mountains at its back rise to over 2,500 feet. Because of the natural mountainous conditions in the area, there is limited space available for development. 4. Soil Conditions: Soils in the area consist of a thin layer of wind deposited volcanic ash and loess, over a very gravelly glacial till. Organic soils several feet deep have formed in closed depressions and in areas bordering small streams. Although the major streams of the area are deeply incised, the natural erosion rate is slow due to the dense vegetative cover and protective organic mat. An exception is the coastal escarpment which is subject to wave erosion and results in massive sloughing of the sedimentary deposits. 5. Flora and Fauna: The dominant vegetation is a Sitka spruce forest with an understory of devils club, huckleberry, false huckleberry, salmonberry, fern and moss. The Kenai Peninsula is an important Alaskan wildlife area. Species found in the area include black bear, brown-grizzly bear, wolf, wolverine, caribou, fox, moose, dall sheep, and mountain goat. Birds and waterfowl found in the area include grouse, ptarmigan, eagles, geese, swans, ducks and a variety of passerine birds. Marine life is also an important product of this area. The coastal waters are important commercial and sport fishing waters which support a variety of bottom fish, salmon fishing, marine mammals and crustaceans. 6. Archaeological and Historical Significance: There are archaeological and historic sites within the regional area. The project site is not near a listed historic site but will be reviewed for any archaeological and __ historical significance prior to construction. In 1880, this settlement was recorded as a village for sea otter hunters, having "68 Kodiak Natives and three Creoles." According to Tumor, it grew around a trading post. A post office was established in Seldovia in 1898. 7. Flood and Seismic Hazard Evaluation: The U.S. Army Corps of Engineers considers the coastal flood hazard in Seldovia to be low; however, storm water runoff can result in damage from erosion. Provisions will be made during the design and construction of facilities funded by this project to minimize facility harm BST Associates Page 88 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three or damage due to storm water runoff in accordance with Executive Order No. 11988. According to the Environmental Atlas of Alaska, the entire Kenai Peninsula is within seismic zone 4. Earthquakes measuring greater than 6.0 on the Richter Scale are possible in this seismic zone and could cause major structural damage. 8. Water Resources: The primary potable water sources being used by the City of Seldovia are surface streams. These sources serve the piped distribution system in the developed area of the city The Barabara Creek Subdivision is served by individual wells; however, there has been limited success in developing wells in the Seldovia area. B. Access: Seldovia is isolated from the Alaska road system by Kachemak Bay. Being separated from the remainder of the Kenai Peninsula, the city relies on air and barge services and the state ferry system. The rural road system in and around Seldovia is adequate for local use. The city maintains a small boat harbor. The principal means of water travel to and from Seldovia is by the M. V. Tustumena operated by the Alaska Marine Highway System. The system provides scheduled service to the city approximately ten months out of the year and ferry scheduling allows only two Days of ferry service per week on consecutive days. Commercial air transport is provided by two air charter services which operate between Seldovia, Homer, English Bay and Port Graham. These services and the existing airport are considered "adequate." C. Population: The 1990 Census data shows that there were 316 people living in the City of Seldovia. The number outside of the city on the road system is 150. Approximately 25% are Alaska Native. D. Public Administration: Seldovia is a first class city incorporated in 1945. The city is governed by a Council-Manager form of government with an elected Mayor and 6 member City Council. Planning services are provided by the Kenai Peninsula Borough. The project area is outside the city limits and under the jurisdiction of the Kenai Peninsula Borough. Under Alaska law, boroughs have authority to plan, plat, and zone all areas, both incorporated and unincorporated, of the Borough. E. Economy: Traditionally, Seldovia has relied upon the harvesting of natural resources to maintain its economic viability. The periodic rise and fall of the marketing trends of these resources has in the past created both positive and negative impacts on the community. The economic makeup of the area includes fisheries, tourism, forest products, marine services, and local service and trade. F. Housing and Public Facilities: The 1990 Census listed 221 housing units inside Seldovia's City limits. The majority of these units are occupied year-round. The Cook Inlet Housing Authority constructed 16 new houses in the Barabara Creek Subdivision through HUD in 1985 and 1987. The city has a police department, fire department, a three bed medical/dental clinic, elementary school with grades K-6, high school with grades 7-12, three churches, and a public library. Electricity is provided by the Homer Electric Association and telephone is supplied by Pacific Telecommunications. BST Associates Page 89 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three The city collects a sales tax and real and personal property taxes. Communications are received from the Kenai Peninsula and Anchorage radio stations, Anchorage TV stations, Peninsula and Anchorage newspapers. The City also operates and maintains the community water and sewer utilities. EXISTING SANITATION FACILITIES: A. Water: Approximately three-fourths (75 percent) of the community unity is connected to the city's piped water and sewer systems. The Barabara Creek Subdivision is not within the service area of the piped utility system and, therefore, has no community water or sewage disposal facilities. Subdivision lots are approximately three acres in size and are mostly owned by Seldovia Native Association (SNA) shareholders. SNA intended the subdivision to have individual, on-lot sanitation facilities. Individual water wells are utilized within the Barabara Creek Subdivision. There are other homes surrounding the community which are not connected to the piped water and have individual wells. B. Wastewater: No municipal waste disposal facilities exist within the Barabara Creek Subdivision. Individual septic tank/drainfield systems are used. The community piped sewer system has a recently completed community septic tank and ocean outfall for wastewater treatment and disposal. This treatment and disposal system has been completed by the City of Seldovia with State grants. The Indian Health Service has Provided technical advice for this effort. C. Solid Waste Disposal: Solid waste is collected by a private company licensed by the city. The present landfill is located south of the city and is maintained by the Kenai Peninsula Borough. D. Unmet Needs: There are four individually constructed Native homes which have been connected to the sewer system in downtown Seldovia and are served by the recently completed city treatment system. Currently there is no sewage disposal area in Seldovia for maintaining septic tanks. A sewage disposal site is planned to maintain the Seldovia city septic tank as well as the scattered individual septic tanks. BST Associates Page 90 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three VACANT AND UNDERUTILIZED || waterfront properties. In addition, the PROPERTIES following sections describe the ownership and land values. (Seldovia waterfront) There are a substantial number of underutilized waterfront properties, buildings and potential building sites in the downtown area which have the potential to provide a basis for economic development. The following map depicts these Table 3-1 OWNER SHIP AND LAND VALUES OF REFERENCED PROPERTIES: Assessed Assessed Value Value Value Tax ID # Owner Land _— Building Total Use 1 19201908, etc. City of Seldovia $4,200 $4,200 Industrial/vacant 2 19201518 Philip D. Chandler $7,099 $43,200 $50,299 Commercial/vacant 3 19201906,7 Hudson Bay Group Ltd. $44,200 $36,500 $80,700 Industrial 4 19201904 Hudson Bay Group Ltd. $103,000 $578,000 $681,000 Industrial/cannery 5 19202605,6 Seldovia Native Association $44,000 $44,000 Vacant 6 1920602,3,4 Seldovia Native Association $69,000 $208,200 $277,200 Industrial /commercial/vacant 7 19203048 Christopher V. Wheeler $16,700 $87,300 $104,000 Commercial/vacant 8 19203059-63 City of Seldovia $132,000 $132,000 Parking, Commercial, Recreational/vacant) 9 19203066 Carl L. Hille $28,800 $131,600 $160,400 Residential /Commercial & Vacant 10 19203070 Jeanne O. Pulliam $20,800 $89,900 $110,700 Commercial/Vacant $469,799 $1,174,700 $1,644,499 Source: City of Seldovia, Kenai Peninsula Borough ———— BST Associates Page 91 City of Seldovia a n rmbt 3 2 . é ELS A e Seldovia Economic Development/Tourism Study Chapter Three Small Boat Harbor Active Cook Inlet Commercial Vessels There are 2,470 commercial vessels located in Lower Cook Inlet. Ninety five percent of these vessels are less than 49 feet in length. Only 117 vessels out of the 2,470 are greater than 50 feet in length. Typical draft requirements for vessels under 50 feet is less than nine feet. Typical vessels between 50 and 100 feet in length could have a draft ranging from approximately 9 feet for a 50 foot vessel to greater than 13 feet for a 100 foot vessel. See figure below. Existing Seldovia Fleet Tables at the end of this chapter provide characteristics of the existing fleet in Seldovia. Status Bathymetry The following table is a result of a survey performed in August of this year. The soundings obtained during this survey indicate that conditions shoaling has been minimal since the Corp of Engineers surveyed the basin in July of 1991. Boat Harbor Constraints (Existing water depths, typical/potential vessels & tidal impacts) Larger vessels currently using the Seldovia Boat Harbor occasionally —_ experience operational constraints on tides below minus (-) two feet. On extreme tides (i.e., tides lower than - 4.5 to -5 feet MLLW.) A number of the larger vessels must use extreme care or cease operations during low water periods. The authorized project depth for Seldovia is -12' MLLW. However, the basin has been dredged in some parts of the authorized area to depths greater than - 12' MLLW. Water depths in moorage areas of the harbor beyond authorized project limits varies from -13 feet MLLW to approximately -8 feet MLLW. Areas immediately adjacent to the main access channel and areas approaching the boat ramp have deficient water depths for the vast majority of the fleet when tides are below an average low tide. At extreme low tides none of the larger boats can deviate from the main 60' access channel without touching bottom. Conclusions and recommendations: Authorized project limits of the Seldovia Boat Harbor should be increased from - 12' MLLW to a minimum depth of -17' MLLW. Seventeen feet below MLLW. is the existing depth of water in moorage areas currently utilized by the larger component of the commercial fleet. Additional recommendations include: increasing the width of the access channel from 60 feet to a minimum of 100 feet and request that the US Army Corp of Engineers evaluate costs and benefits resulting from expansion of project limits within harbor berthing areas. Currently, several large commercial vessels utilize areas south and east of the authorized project limits for moorage. BST Associates Page 93 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three RECOMMEND CHANNEL WIDENING FROM 60’ TO APPROX. 100° Figure 3-2 Soundings EXPAND AND DEEPEN PROJECT AREA FROM 12° TO A MIN. OF 17° August 9, 1992 Utti & Associates 12.2 32 SF 122,133 142) 14.2 152 gum, 18. 14.2 = ie = op 98 [J ej} 14.2__] iS, 19.2) 122 17.2 F3o\ 21 28 48 © 197 i) feo © tepiiiz2 ‘Lo ize 3. On 14.2 142) “fee '42lfi72 172 isos = rei ia —= h7.2 1 2 2 igo = 17.2 badps 17 L4* 152]) 46 [ize 142] 1162 £4183 jo, 180 Peg 10.7 1a 17.2 16,Z.]|16.2 16,2 }|_ _ 17, Tt _Lois.2 132 Ife 167]| 162 16.2 , 18.0 PR | ee FA 17,2 162]/16.2 — 18.0 eG 10.7 15,2 16.2 16, 15.7 ~ 17.0 56 (o 4 18.0 ' 175 $5 97 107 143 5 |lo9 10.0 16.0 16.0 17.0 18.0 ve dep, 17 8.0 go ‘7 127 1170 70 60 80 90 90 100 110 : BST Associates Page 94 City of Seldovia Seldovia Economic Developmenv/Tourism Study Chapter Three Figure 3-3 Length vs. Draft Commercial Fishing Fleet ~ Ss 8 Harbor Utility 5 Average minus Tides 20 30 40 50 60 70 80 90 100 110 120 130 oars "Pern he Pawn Length (ft.) <== _ BST Associates Page 95 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three ee APPENDIX TABLES BST Associates Page 96 City of Seldovia niaopjas fo AnD 26 28g sammoossy IS sayeloossy 7 IQ, :a0Inog we ££°C- 18'I- Is'I- (ne by'c- 9EC- 8v'C- STC bl i- 78 I> 60°7- asvloAy 06'°0- Oe T- 0s'0- Og I- OL'I- 08'0- 0L'0- 00'I- 0g 0v'0- 07°0- 0L'0- Or I- ag OL'I- 09°0- 0£0- 0s'I- 06'0- 0s'0- 06'0- o10- OL I- 10- OCT Oll- 07'0- 06'0- 0r'0- 00°7- 03'0- Ov'l- 07'0- 09'I- el- On'7- 07 I- Oll- 08'I- 0s'I- 03°0- OLT- ov'I- 09'I- O10- 07 I- | Ag O1'7- Ov'l- 09°0- Ol'e- 09'I- 0€T- 06°7- 06'1- Os'I- 09'I-. os'0- 9 Os I- Or'I- 0£'0- 07'0- Os'I- Of e- OLT- Oe 06°0- Ole- 0s°0- 9T- 0L'0- 00'I- 07 09°€- 06°7- 09°€- 07'7- 00°7- 00°¢- 06'0- Ov'I- oC OS'I- 0v'0- 00'r- Os'I- 06'0- 07'e- 0s I- 09'I- 08'€- 08'€- OL- oI- Ol'e- 06°0- 06'r- Og e- Ov'e- Ov'7- 0s'0- 00'I- 00's- 0S°7- 09°I- 9°0- 0c b- OL'C- 08°b- 0€7- 07'€- 07 I- 06'0- 0v'0- 0L'0- OL'€- 09°€- $'0- 06°F 0c Fr 0s'0- 00°7- 0€7- 06'°0- On'7- 07 C- 07'S- OS'€- 07 I- ee 06'r- 07's- 06'€- 0€7- 06'0- 077- 09°€- 06'€- OL'I- OL 7- Ov'r- se Ofer Oes- 09°0- 07'0- 07'0- 07'e- 09°b- Ols- OS’ OL'€- 07'0- re 00'€- 09'p- 00°7- 09°I- Os I- 08°€- 06'F- 09°S- 00°7- 06'0- Ov'r- v- 07 I- Ol'€- 0z'0- Or'0- O¢'7- 06°€- OL'b- 07's- 06°7- Ole- 09'€- ee 07'0- 06'0- 07'0- O10- 08°7- 09'€- 06'€- 00°F- OL'I- 08'I- 07 T- 1 4 08°0- 0£'0- 09'0- 06'0- 08°7- 08'7- Or'7- 00°C- 09°0- O1'0- Or'0- 9°0- oad AON LOO Ldas Onv ATO aNof AVW UdV YUVW add cor f Sepn snurw jo Aouonbery 2 sopry, oweyxg) souenyuy [epLy 2661 6 LSADAV SONICNAOS YOUUVH LVOd TIVWS VIAOCTAS C-E AGOL aaayy sajdvyD Apnig wslino[juaudojaaaq 21mouoag viaopjas Seldovia Economic Development/Tourism Study Chapter Three Table 3-3 Vessel Characteristics (Seldovia Port of Call) BOAT NAME LENGTH BEAM DRAFT WEIGHT (FT.) (FT.) FT.) (TONS) 20 TO 30 FEET ESKIMO SCOUT 25 33 L&I 26 9.5 PINAFORE 28 10 4.5 LACATACA 23 9.5 4 HOOKILOW 22 8.6 a SEA DUCK 28 8 CHACON #2 24 AK6445L 20 DUCK 24 REVENGE 21 DEE DEE II 28.5 TS PRIME TIME 28 WESTPORT 26 12 12 JAYHAWKER ZT 8 M/V MAGGIE ANNE 26 nS CROSS CHOP 25 JAN D 28 SEASTRAND 26 8.8 3 SHEARWATER 22 MINNOW 22 8 1 SHANON DOAN 2 8 FIRST TRY 28 10 3 MY CHOICE 28 10 3 PLAYFUL PENGUIN 27 - 8 LOON-AT-SEA 23 8.5 5 Dated September 1992 Source: Harbormaster, BST Associates, Utti & Associates — ——— BST Associates Page 98 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Table 3-3 (Continued) BOAT NAME LENGTH BEAM DRAFT WEIGHT (FT.) (FT.) (FT.) (TONS) CARISA 26 8.5 JOE GERRY 26 8.5 PEREGRINE 28 9 FANTASIA 28.5 4 HUFFEN 24 3 JOSEPH E. HUNT 29 4 JIM HARDWIG 24 WM. C. ANGLIN 27 4 COMING SOON 28 GLAS SLIPPER 28 BAY BEE 25 POCOHANUS 23 2 PAMELA D 23 2 Dependence 24 5 Tammy L. 28 2 Donica Ann 20 0.25 Snapshot 25) 3.25 Smokin Joe 28.75 2) Teaser 24 3 MIN. LENGTH 20 MAX. LENGTH 29 AVE. LENGTH 25.53 MIN. BEAM Ts, MAX. BEAM 12, MAX. DRAFT - LIGHT 5 MIN. WGT. 2 MAX. WGT. 12 AVE. WGT. 4.1 Source: Harbormaster, BST Associates, Utti & Associates SSS BST Associates Page 99 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Table 3-3 (Continued) 30 TO 40 FT. BOAT NAME LENGTH BEAM DRAFT WEIGHT (FT.) (FT.) FT.) (TONS) OBSESSION 30 12 9 SCOTCH & WATER 38 13.2 3 8 DANNY BOY 32 ll 5.5 LADY HAWK 30 10.5 7.33 5 C-MARIE 33 10 SS KELLY DUNN 32 ll 5 SIVA 34 10.5 7 WANDA LYNN 32 12 5 RIP RUNNER 32 MEMOLOOZE 32 SHEARWATER 32 PEGASUS 32 9.6 3 TIANNA LEE 32 11.5 9 JANET-B 38 12 NORTHERN FLYER 34 8 PEGASUS 38 3 16 BRANDY 34 13 ELAINA JEAN 32 5 IST STEP 32 5 MAD VIKING 36 5 26 DEBRA LEE 32 ll 22 HARD LABOR 33 MALILA 32) 10 INSATIABLE 32 HALEY SEA 36 Pe AZAR 34 1s 4.5 KATHY L 38 13 125 S/V ARMOR 32 Ul Te) HALIBUT ENDEAVOR 36 12 RUNNING FREE 32 8 6 MOTHER EARTH 33 ll 10 NORTHERN LIGHTS 38 14 10 SEA BREEZE 32 11 8 NORTHERN FLYER 34 11 8 SIVA 34 10 NAUTICAL SUN 36 3.50 PREDATOR 34 13 8 NIGHT HAWK 32 12 3 16 STARLIGHT 32 ll 6 RIPRUNNER 82 11 Source: Harbormaster, BST Associates, Utti & Associates BST Associates Page 100 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Table 3-3 (Continued) BOAT NAME LENGTH BEAM DRAFT WEIGHT FT.) (FT.) (FT.) (TONS) LADY ANN 36 ll 9.5 COMING SOON 32 5 SOON 36 WESTPORT 36 6 ARCTIC FOX 36 3 MIN. LENGTH 30 MAX. LENGTH 38 AVE. LENGTH 33.48 MAX. DRAFT - LIGHT 7.33 MIN. BEAM 8 MAX. BEAM 14 MIN. WGT. 4.5 MAX. WGT. 26 AVE. WGT. 9.2 Source: Harbormaster, BST Associates, Utti & Associates i BST Associates Page 101 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Table 3-3 (Continued) 40 TO 50 FT BOAT NAME LENGTH BEAM DRAFT WEIGHT (FT.) (FT.) (FT.) (TONS) MAR-BAR-SHELL 45.00 15 6 12.25 KAILA NICALE 42.00 SILVA EAGLE 42 12 BADGER 40 12 SIRRAH 42 5 38 SCRIMSHAW 42 12 EVERETT 40 11 22 PACIFIC SUN 47 14 26 DANA 40 12 6.50 25 M/V KERENSA 40 14 3.50 10 DAYBREAK 42 13 16 JILL ALLISON 42 25 KAHUNA 42 25 INNOVATOR 44.00 14 3.25 16 SOON 40 Haley's Comet 50 5.33 Stellor 47 3.25 Sea Otter 47 6.00 MIN. LENGTH 40 MAX. LENGTH 48 AVE. LENGTH 42.27 MIN. BEAM 12 MAX. BEAM 15 MAX. DRAFT - LIGHT 6.50 MIN. WGT. 10 MAX. WGT. 38 AVE. WGT. 20.7 Source: Harbormaster, BST Associates, Utti & Associates ———_— BST Associates Page 102 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Three Table 3-3 (Continued) 50 TO 62 FT. BOAT NAME LENGTH BEAM DRAFT WEIGHT (FT.) (FT.) (FT.) (TONS) MISH MISH 54 16 7.00 30 LINDA LORI 62 13 35 CHALLENGE 54 15 3.50 29 IRISH 53 14 30 F/V SHENANDOAH 53 17.5 13 FOX FIRE 50 15 27 M/V ENDEAVOR 60 17.5 57 Donna Ann 58 9 Cinmar 56 5 Jo Ann Marie 60 9.50 Deliverence 58 9.50 Laura S 58 10.50 No Quarter 51 5.00 MIN. LENGTH 50 MAX. LENGTH 62 AVE. LENGTH 55.14 MIN. BEAM MAX. BEAM MAX. DRAFT - LIGHT 10.50 MIN. WGT. 13 MAX. WGT. 57 AVE. WGT. 31.6 OVER 62 FEET LADY JESSIE 90 5 FRANCES - E 15.4 10 50 Independence 78 11 Alliance 100 9 Dona 80 5.50 Beaver 76 5:75 Beagle 62 4 Gladys B. 72 5 Kona Kai 90 5.75 MAX. DRAFT LIGHT 11 Source: Harbormaster, BST Associates, Utti & Associates BST Associates Page 103 City of Seldovia CHAPTER FOUR TOURISM Seldovia Economic Development/Tourism Study Chapter Four TOURISM Tourism on the Kenai Peninsula Tourism is a very important and vibrant part of the Kenai Peninsula economy. As will be demonstrated, a relatively large share of sales and jobs on the Peninsula (including Seldovia) depend upon tourism. There are a relatively large number of tourists that come to the Borough. BST Associates estimates that in 1991, there were more than 687,000 visits to the Peninsula. The overwhelming number of visitors (i.e, over 90% of the total) arrived in the region by car (see Table 4-2). Most of these visitors, in turn, came from the Anchorage area - only about 10% of tourists visiting Kenai by car are assumed to be non-residents. In fact, the bulk of the Peninsula's tourists are from the Anchorage. Fully, 84% of all Peninsula visits (591,400) are from the Anchorage market. From two surveys of Anchorage households conducted by the McDowell Group in 1985 and 1987, a number of conclusions about resident visitors to the Kenai can be made. Based on these surveys, between 73% to 84% of Anchorage households have visited the Kenai sometime in the past. Those who have visited the Peninsula average close to 5 trips per year (4.7). The average length of stay on these forays is 2.2 days, with 42% staying 2 days, 32% 3 days, and 21 % staying only one day. Most of these stays are made in campgrounds: over 6 in 10 Anchorage visitors used them either usually or occasionally. The average household expenditure was $111 in 1987 dollars (the last year data is available). The Peninsula destinations receiving the most mention were Seward and Homer, although the Kenai River, Soldotna, Kenai, and Russian River were all frequently listed as favored locations. In fact, these six sites accounted for three-quarters of all responses. A separate response for Seldovia was not available in this survey. Far and away, fishing was the most popular activity that Anchorage residents participated in while visiting the Peninsula. Close to three-quarters of the respondents mentioned this activity. Camping and sightseeing were the second most favorite pastime, mentioned by about one-third of the respondents, followed by visiting friends and relatives, hiking and boating. Non-resident visitors accounted for 14% of the total Kenai Peninsula tourist traffic which translates to 96,000 people. This is about 12% of the total non-resident tourists who have traveled to Alaska. The majority of the non-residents (65.5%) come to Kenai by car. An almost equal number of non-resident tourists used cruiseships (16,078) and air (15,690), while a very small complement of visitors used the Alaska Marine Highway System ferries to arrive on the Peninsula. All these visitors, resident and noN-resident combined, spent an estimated $38 million for goods and services on the Kenai Peninsula during 1991 (see Table 4-1). Of these expenditures, about 6 out of every 10 dollars was devoted to lodging and recreation and amusement services ($20.8 million). Visitors spent an additional $7.6 million on eating and drinking establishments. Additional dollars were devoted to other retail trade items (food, apparel, gasolene, etc.) and transportation. Overall, tourist spending BST Associates Page 104 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Table 4-1 Impact of Tourism on Kenai Peninsula Borough Taxable Retail Sales 1991 Tourist- Annual Percent Estimated Total Related Retail to Tourist Employ- Employ- Industry/Sector Sales Tourists Sales ment ment Transportation Local & InterUrban Transport $2,275 72% $1,638 Water transportation $695,887 47% $327,067 Air Transportation $964,799 31% $299,088 Total Tourist-Related Transportation $1,662,961 38% $627,793 30 11 Retail General Merchandise $12,203,018 6% $732,181 Clothing Stores $10,097,348 4% $403,894 Food Stores $80,271,793 3% $2,408,154 Eating & Drinking Places $36,176,391 21% $7,597,042 Service Stations $13,154,963 T% $920,847 Misc. Retail $45,204,789 ™M% $3,164,335 Total Tourist-Related Retail $197,108,302 8% $15,226,453 2506 200 Total Retail Sales $251,270,772 6% $15,226,453 Services Hotels & Other Lodging $19,029,152 66% $12,559,240 Personal Services $4,433,060 2% $88,661 Auto Repair $1,328,832 66% $877,029 Amusement & Rec Services $12,460,344 66% $8,223,827 Total Tourist-Related Services $37,251,388 58% $21,748,757 2807 1628 Total Services $77,655,520 28% $21,748,757 Total Tourist-Related Borough $236,022,651 16% $37,603,003 5343 1839 Total Borough $436,580,887 9% $37,603,003 Sources: Kenai Peninsula Borough Finance Office; "Alaska Visitor Industry : An Economic Profile, McDowell Group, July, 1991; BST Associates BST Associates Page 105 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four represented almost 10% of total Peninsula | Tourism in Seldovia is a small portion of the taxable retail sales. tourist industry on the Peninsula. Its 16,200 : oo, visitors are approximately 17% of total Kenai Tourism on the Kenai Peninsula occurs almost | tourist visitors. Tourism is far more important entirely during the summer. The Alaska | to Seldovia's economy that it is to the eae of Tourism, in its mania Borough's. Almost one-fourth of Seldovia's Alaska Visitor Progr ae Statistic Program II" | retail sales were due to tourists compared to estimated that about 75% of tourist spending only 9% for the Peninsula. on the Peninsula takes place during the summer months. Visitor expenditures support approximately 1,800 workers on the Peninsula, about 12% of total Kenai Borough employment. A very high proportion of this employment was concentrated in the hotel/motel and amusement/recreation services. Table 4-2 Estimated Tourist Visits to the Kenai Peninsula 1991 Total Percent Resident Nonresident Percent Tourist Total Visitors Visitors Nonresident Visitors Tourists Mode Cruiseship 0 16,078 100.0% 16,078 2.3% Fairsea 0 10,174 10,174 1.5% Jason 0 2,160 2,160 0.3% Sagafjord 0 3,744 3,744 0.5% Highway 567,571 63,063 10.0% 630,634 91.8% Air 23,535 15,690 40.0% 39,225 5.7% Kenai Airport 16,627 11,084 27,711 4.0% Other Airports 6,908 4,606 11,514 1.7% Ferry 269 1,122) 80.7% 1,391 0.2% Valdez-Seward 217 905 1122 0.2% Other 52) 217 269 0.0% Total 591,375 95,953 14.0% 687,328 100.0% Source: McDowell Group, BST Associates ee BST Associates Page 106 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Tourism in Seldovia In 1992 an estimated 21,147 people arrived in Seldovia, 16,217 or 76.7% of whom came to Seldovia as tourists (see Table 4-3 ). About 71% of these tourist come to Seldovia by means of the three tour boats that ply between Homer and the City: the Rainbow Connection, Endeavor, Denaina and Tulchina. Of the 11,480 tour boat passengers, an almost identical number were taken to Seldovia by the Rainbow Connection and the Endeavor (4,299 and 4,214 respectively), while the Denaina accounted for an additional 3,000 visitors (see Table 4-3). Given the summer orientation of Seldovia tourism, it is not surprising to find that all but 64 tour boat passengers visited the City between the months of May and September, with about 90% of the visitors arriving between June 1 and August 31. The Rainbow Connection is the only boat to carry passengers after September. Approximately 1,842 or 16% of total passenger aboard tour boats stayed overnight. The remainder returned to Homer the same day. An additional 3,343 tourists arrived in Seldovia by air, almost all of whom flew on three air services (ie, Homer Air, Southcentral, or Gulf Air). Air traffic represented 39% of total tourist traffic. Homer and Southcentral carried about the same number of tourists, 1,225. Gulf Air, which had a joint marketing arrangement with a Seldovia hotel, carried around 1,000 passengers from Anchorage during the summer of 1992, up from 620 in 1991. This promotion, which featured a $99 fare including a boat ride and an evening at the hotel, will probably be discontinued next year. The Alaska Marine Highway System Ferry M/V Tustumena carried 1,426 passengers to Seldovia, an estimated 90% of which were tourists. BST Associates Page 107 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Table 4-3 Estimated Tourists in Seldovia via Tour Boats, Ferries, and Aircraft 1991/1992 M sf rt Month Tour Boats Ferries Airplanes Total Percent Jan 0 7 0 7 0.0% Feb 0 0 0 0 0.0% March 0 a 0 44 0.2% April 0 112 0 112 0.5% May 432 165 310 907 4.3% June 2,348 279 1,685 4,312 20.4% July 4,507 200 3,235 7,942 37.6% Aug 3,403 276 2,443 6,122 28.9% Sept 726 102 521 1,349 6.4% Oct 0 105 0 105 0.5% Nov 0 58 0 58 0.3% Dec 0 78 0 78 0.4% Total 11,480 1,426 8,241 21,147 Percent Tourism 100.0% 90.0% 41.9% 716.7% Estimated # of Visitors 11,480 1,283 3,454 16,217 Sources: Seldovia Harbour Master, Alaska Department of Transportation & Public Facilities (ADOT/PF), Alaska Marine Highway System, ADOT/PF (Central Region); BST Associates @Table Text@ a RE SE BST Associates Page 108 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Figure 4-1 . Travel to Seldovia 1992 “ ZX A o+ * T T T T Jan Feb March Apr May June July Aug Sept Oct Nov Dec Passengers Thousands —= Tour Boats -*—Ferrles ~—* Alr Planes Sources: State of Alaska, BST Associates Figure 4-2 . Travel to Seldovia By Mode and By Residence Thousands 12 10 Tour Boats Ferries Air Planes MB Total Travelers Tourists Residents Sources: State of Alaska, BST Associates BST Associates Page 109 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Role of Tourism in Seldovia's Economy Tourism plays a very significant role in Seldovia's economy. It is estimated that approximately 19% of Seldovia's total 1991 taxable retail sales is attributable to tourism ie., approximately $559,000 in taxable retail sales were attributable to tourism (See Table 4-4). It is estimated that 16 jobs were generated directly by the tourist sector, which accounts for 17% of all non-agricultural jobs and 27% of all private sector employment. Tourism clearly constitutes the major sources of income for the lodging and restaurant business in Seldovia. However, it also plays a lesser though significant role in contributing sales to such local business such as the food store, the gift shop, fuel oil dealer and the local bars. The contribution made by tourism to these businesses estimated to be from 18% to 25% of total annual sales. The above can be considered a conservative assessment of tourism's impacts. since it deals only with direct impacts. As such it does not take into account the secondary impacts of tourism as seen in the local expenditures of Seldovia's tourist-related business owners and employees. This may account for an additional 10% to 15% of sales. For the impact of tourism on municipal revenues, see Chapter Thirteen, Importance of Local Government to the Seldovia Economy. ee ES EES Sar eno ten am ee ee en BST Associates Page 110 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Table 4-4 Tourism Impact on Taxable Retail Sales Seldovia 1991 Seldovia Sales to Sales to Total Percent © Retail Estimated SIC Residents Tourist Sales Tourist Sales Tourist CODE Tourism-Impacted Industries Per Emp Employment 4110 Local/Subrbn Transportation $0 $560 $560 100.0% 4499 Water Transportation Services, NEC $0 $500 $500 100.0% 4512 Air Transportation, Scheduled $1,250 $17,363 $18,614 93.3% Total TCU $375,502 $18,423 $393,926 47% $43,092 0.4 5499 Misc. Food Stores $846,833 $115,477 $962,311 12.0% 5812 Eating Places $29,984 $89,952 $119,937 75.0% 5813 Drinking Places (Alcoh. Bevgs) $231,465 $44,581 $276,047 16.2% 5947 Gift/Novelty/Souvinir Shops $381 $1,145 $1,527 75.0% 5983 Fuel Oil Dealers $505,190 $26,588 $531,779 5.0% 5999 Misc Retail NEC inc Art Galleries $655 $2,622 $3,278 80.0% Total Retail Trade $1,614,510 $280,368 $1,894,879 14.8% $102,850 21 7011 Hotels, Motels & Tourist Court $0 $199,087 $199,087 100.0% 7021 Rooming & Boarding Houses $0 $13,426 $13,426 100.0% 7999 Amusement, Recreation Svc, Nec. $0 $47,773 $47,773 100.0% Total Services $0 $260,286 $260,286 100.0% $20,326 12.8 Total Tourist-Impacted Industries $1,990,013 $559,077 $2,549,091 21.9% 16.0 Total Taxable Retail Sales $2,400,420 $559,077 $2,959,498 18.9% Source: Kenai Peninsula Borough Finance Department, BST Associates a BST Associates Page 111 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Description of Tourist Facilities There are 11 hotels, boarding houses and/or bed and breakfast facilities in Seldovia. These facilities have the capability of accommodating 139 persons at full occupancy. The following list indicates the prices and facilities available within Seldovia's hospitality industry. A BST Associates Page 112 City of Seldovia Seldovia Economic Development/Tourism Study SELDOVIA ACCOMMODATIONS Table 4-5 Chapter Four TIM & DEB ROBERTSON Page 113 NAME OF ESTABLISHMENT TYPE OF ACCOM. BEDS occ FEE W/O TAX SERVICES AVAILABLE ANDY'S PLACE 1 STUDIO APT. 1 QUEEN 4 $50 1-2 COOKING FACILITIES P.O. BOX 121 1 DBLE COUCH 75 3-4 234-7481 ANDY AND ANNE ANDERSON ANNIE McKENZIES'S 13 ROOMS 19 32 $58 1 COFFEE BOARDWALK HOTEL 842 CONTINENTAL P. O. BOX 72 98 QUEEN BREAKFAST 234-7618 CROW HILL B & B 1 LARGE ROOM 1 DBLE SOFA 5 $75 1-2 LARGE BREAKFAST P. O. BOX 257 1 OVER-FLOW 2 TWINS 903 GUIDED TOURS 234-7410 FOR FEMALE 1 TWIN 105 4 RAY & SUSAN SPRINGER DANCING EAGLES CABIN 1 KING 6 $40 HOUSE B & B HOT TUB B & BCABIN 1 BDRM LOFT 4 SINGLES 125 DBL OCC. FOR SLIDE SHOW P. O. BOX 264 1 SINGLEB & B SOFA HOUSE B&B NO CHILDREN OR 234-7627 IN MAIN HOUSE 35 EXTRA PERSON PETS DAN LETHIN OVER 2 GERRY'S PLACE 3 ROOMS 2 TWIN 6 $40 1 LARGE BREAKFAST P.O. BOX 74 BEDS EACH 60 2 234-7471 BILL & GERRY PATRICK HARMONY PT LODGE 3 RUSTIC 1 SLEEPS 5 13 3 MEALS SERVED P.O. BOX 110 CABINS 2 SLEEPS 3 GUIDED TOURS & 234-7858 1 SLEEPS 2 ACTIVITIES, KAYAK TIM & ILA DILLON MT. BIKES 7 el BST Associates City of Seldovia Seldovia Economic Development/Tourism Study as - Chapter Four NAME OF ESTABLISHMENT TYPE OF ACCOM. BEDS Occ FEE W/O TAX SERVICES AVAILABLE 7. SELDOVIA FISHING 3 ROOMS 6 TWIN BEDS 6 $40 1 FISHING CHARTER, ADVENTURES LARGE BREAKFAST, P.O. BOX 121 OCEANFRONT VIEW OF 234-7417 SELDOVIA AND DAVE & PEGGY CLONINGER KACHEMAK BAYS 8. SELDOVIA LODGE 10 ROOMS 1DBLE+1TWIN 30 $37 1 COLOR TV EACH ROOM P. O. BOX 136 IN EACH ROOM 432 MOVIES AND 234-7654 RESTAURANT FRED NEUMEYER 9. SELDOVIA ROWING 1 SMALL APT 1DOUBLEBED 5 $64 COOKING FACILITIES CLUB WITH 1 SMALL 2 ROLLAWAYS 15 ADD. P. O. BOX 41 BEDROOM 234-7614 SUSAN MUMMA 10. BAYVIEW LODGE 3 FURN. APTS 2 DAY BEDS 18 $50 1 BEDROOM COOKING FACILITIES P.O. BOX 41 5 DBLE BEDS 10 EA ADD. BAY VIEW.B &B 234-7633 1 DBLE COUCH 60 2 BEDROOM AVAILABLE. BIKE JEAN & WAYNE STAMPER 2 TWIN BEDS RENTAL. TV 2 ROLL-AWAYS 11. SELDOVIA B&B 2 COMPLETE UNITS 14 $76 1-2 KITCHEN IN EACH P.O. BOX 121 4 BEDROOMS 963 UNIT. CONTINENTAL 234-7417 1164 BREAKFAST. NICE AREA CODE IS (907), ZIP CODE IS 99663 VIEW OF HARBOR Source: Seldovia Chamber of Commerce, 1992 BST Associates Page 114 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Seldovia's tourism industry is becoming better organized. Of special importance, the tourism industry has developed a philosophy or attitude toward tourism which attempts to make it both acceptable to local citizens and the visitor. SELDOVIA-TOURISM MARKETING PHILOSOPHY [Written as a result of meetings of the Seldovia Tourism Committee, 1992.] essence of what makes Seldovia table as a visitor destination is its iled natural beauty, and a community sphere that is safe, quiet, and friendly. A to Seldovia is in many respects like a ey back in time to a simpler, calmer way life. These very qualities are our most able assets, yet they are fragile ones, prone destruction in the event of inappropriate wth and development. "We wish to encourage the growth of the visitor industry in Seldovia, stopping short of becoming a tourist mecca. While it is desirable to enhance our visitor facilities and activities, we recognize that too much enhancement or development can threaten the community atmosphere and beauty, which are the very assets we seek to protect. "Balance, then, is the key word. We wish to strive for a balance between visitor industry and community that we do not see i evidence in Homer, the Homer Spit, or th Kenai-Soldotna area. Seldovia could no sustain the large numbers of sport fisherme’ charter operators, food and gift vendors, an RV traffic seen in other Peninsula towns without destroying our marketable assets. BST Associates Page 115 "Part of maintaining this balance is already achieved for us. We recognize that the lack of highway access and the added expense and time involved in travelling to Seldovia will eliminate many potential visitors. However, as Seldovia's good reputation spreads and as Peninsula visitors in increasing numbers wish to escape the crowds, our lack of accessibility will become somewhat less of a barrier. Thus, it is not prudent to rely upon our inaccessibility alone to control visitor industry growth. "The other way to control visitor industry growth is through the size and content of our marketing efforts. While we want to encourage in-state, Lower 48, and international visitors on a year round basis, we wish to convey that Seldovia is special and that the Seldovia visitor experience will be quite different from the typical visitor experience on the rest of the Kenai Peninsula. "We do not want to encourage cruise ships to anchor in Seldovia Bay and bring groups ashore because the sheer numbers of people would be overwhelming here. An influx of 100 people is about the maximum that can be comfortably handled for a day tour. For overnight visitors, we can accommodate groups of 50 or less and would like to encourage conventions and seminars of this size. We want ‘ocus on being a visitor destination and not a station for travellers to Rocky River, for mple. We want to encourage travel writers visit Seldovia so that we can emphasize the ality of the visitor experience here. Finally, e want to target the outdoor enthusiast and e eco-tourist in our marketing, because we eel we have the most to offer these people. "Visitors to Seldovia will not find mini-malls, traffic _—ilights, | convenience "all-night" stores, 24-hour film developing, rows of souvenir shops or smart boutiques, or endless choices for dining and dancing. Nor will City of Seldovia od Seldovia Economic Development/Tourism Study Chapter Four they find pre-packaged visitor activities in great numbers, or theme parks or events staged solely for the tourist. These are not the strengths of Seldovia. To the contrary, our drawing card is that a visitor to Seldovia is embraced by the openness and warmth of our village. "Kids and dogs race by you on a dirt ad, eagles soar overhead, and crows scold ou from a huge spruce tree as you pass. A ush laden with berries beckons you to stop nd linger awhile. Fishermen along the aterfront go about their business as you ander the floats. Sea ducks and a curious tter float by. Local artists work at a operative gallery, and as you walk in, fresh offee and an eclectic circle of chairs around a ood stove invite you to sit and relax. "Whether you hike, bike, beachcomb nd picnic, visit the old Russian Orthodox hurch, charter a halibut trip, kayak, pick erties, explore Seldovia's history by walking he self-guided museum tour, or simply sit on a bench and enjoy the view, the visitor to Seldovia becomes a part of the community by sharing with residents the very same things we do here ourselves. "It is this quality of experience we wish to convey with our marketing slogan as illustrated below:" PEOPLE COME TO SELDOVIA FOR WHAT ISN'T HERE "In Seldovia you won't _ find theme-parks, tourist attractions, rows of cute boutiques or fast food stands. No traffic lights, crowds or fast paced anything. "WHY? Well, when you have spectacular scenery, abundant wildlife, fantastic fishing, warm friendly places to dine and stay, and the charming old-time atmosphere of an historic Alaskan fishing village, why mess with success? "Contact Seldovia Chamber of Commerce, Drawer F, Seldovia, AK 99663 (907) 234-7643." ee a em Sn RSS BST Associates Page 116 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four The tourist industry has also developed a trail program to provide interesting outings for visitors and local citizens alike. "Several other public access trails exist City property. One runs from the end of der St. to a gazebo on Susan Lake. Another il, along a dirt road, runs from the airport out one mile up a steep and wooded slope to ie city reservoir. A footpath continues from e head of the reservoir, along its edge, to its d, stopping in an alpine meadow. SELDOVIA TRAIL PROGRAM By Susan W. Springer "At present, a partnership is being rged between the Seldovia Boy Scouts, the Idovia Native Association, and the chemak Heritage Land Trust. This summer, ie Boy Scouts plan to build a trail from an cess point on the old logging road that runs the head of Seldovia Bay, through meadows d woods (approximately 1/2 to 1 mile) to the terfalls on the Seldovia River. The trail will built in accordance with strict Boy Scouts of erican guidelines. As the landowner, the Idovia Native Association provides guidance trail planning and use, and retains final risdiction on all matters relating to the trail d its future use. The Kachemak Heritage nd Trust will serve as a sponsor, donating eded items and services, such as tools, inting of maps, trail signs, etc. This will be a ail for non-motorized traffic. Once the details f the partnership are final (it is just in the reliminary stages at present), it is hoped that is alliance can be used to create new trails on annual basis. "The first public trail in Seldovia was built in the spring of 1990, as part of a cross-curricular program at the Susan B. English School. Several teachers and community members did the preliminary work, which consisted of: "* notifying the adjacent landowners of the intent "* planning the trail with a volunteer professional surveyor so that the trail (which begins on school property) followed a public utility easement. "* gaining permission from the Seldovia Native Association for the final portion of the trail, which crosses their land. "For 3 weeks in May, approximately 15 Junior and Senior high school students, together with faculty and community volunteers built the trail, using donated tools. Lumber fo’ a boardwalk and for trail signs was obtaine through the school. A trail map was created b the students and printing done by the school. Subsequent printings of the map have been funded through the Chamber of Commerce. The trail was named the Seldovia Otterbahn, and is restricted to nonmotorized traffic. "Throughout the woods and mountains rrounding Seldovia are many hiking and ski ails, cleared and maintained by various private dividuals. However, since the majority of ese trails are on Seldovia Native Association nd, it is inappropriate to publish them as blic trails and to encourage their use by n-residents. Historically, The Seldovia ative Association has been very gracious in lowing unrestricted use of their land by local sidents. If in the future any of these trails are ade public, it would likely be through the "At the end of the Otterbahn, one can walk the shoreline and arrive at the Outside Beach, a city park. From the Outside Beach, a city dirt road continues approximately 1/2 mile to the City owned RV camping park. BST Associates Pe 7 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four efforts of the partnership mentioned above, with the Seldovia Native Association again having final jurisdiction over said trails and their use." Opportunities for Additional Tourism The opportunity for additional tourism appears very favorable for Seldovia. Interviews with industry officials, including the Kenai Peninsula Tourism Marketing Council, indicate a growing interest by tourists in visiting the area. The development of the industry will focus on longer stays by tourists during the summer season. Efforts to attract group tours, conferences and other parties will be very successful if marketed properly. Typically, these longer duration visitors are also interested in guided tours, fishing trips, cultural and historic events and local arts and crafts. At the same time, day tourists will continue to visit. Day tourists are extremely important to the local artists, artisans and restauranteurs. A major key to realizing Seldovia's tourist potential is a concerted and organized marketing campaign. Some of elements of this campaign are listed below. Future follow-on efforts by the City should develop a marketing campaign including brochures and a video presentation. Seldovia Tourism Strategy Basic Kenai Peninsula Tourism Facts 1. Tourism Active on Peninsula: (680,000 + annual visitors) Increasing over time 3. Vast majority from Anchorage: 90% + of tourists 4. Most enter Peninsula in auto via highway 5. Large proportion of Anchorage households visit Peninsula 6. Fishing and other outdoor things main reasons for visits 7. Vast majority visit Homer and Seward 8. Most do not use tours or travel agents Seldovia has a market already: 680,000 + annually visit Kenai Peninsula, 90%+ are Anchorage residents., most of whom use cars. 70%+ of Anchorage household annually visit Peninsula. They are the target market. NOTE: WHATEVER IS DONE THERE REMAINS A KEY ORGANIZATIONAL ISSUE: WHO IS GOING TO DO ALL THIS? WHOIS GOING TO FINANCIALLY SUPPORT THESE ACTIVITIES? Possibilities: 1. City 2. Individual merchants 3. Group - either chamber of commerce-type organization or all tourism-related businesses BST Associates Page 118 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four Resident Market Given size, proclivity to visit Kenai and proximity of market: at first, concentrate efforts in Anchorage Advantage: Market is close - potential visitors already in Alaska Slant/Slogan: "Now that you've tried the rest of the Kenai Peninsula, try the best - unspoiled Seldovia" 1. Advertise in Anchorage papers during the summer 2. Create promotional campaigns similar to $99 week-end/air & boat tours 3. Advertise along Peninsula highway 4. Advertise in Homer and Seward, where and would be most visible 5. Contact Anchorage media especially travel writers for story 6. Create a brochure and video 7. Develop other marketing materials: pens, T-Shirts (see arts & crafts), etc. Non-Resident Market 1. Approach travel writers in Washington, Oregon, and California for story on Seldovia 2. Inform travel agents and travel agents' organizations about Seldovia 3. Advertise on Planes: Air Line magazines 4. Advertise in Alaska/Anchorage promotional materials such as Anchorage Visitors Guide. NOTE: SELDOVIA NOT MENTIONED WHEN TALKING ABOUT KENAI PENINSULA 5. Advertise in Anchorage Airport/Visitor Information Center 6. Contact travel magazines Conde Nast, etc. 7. Contemplate joint marketing with 1) all Seldovia tourism businesses, 2) all Peninsulatourist industry, 3) selective Peninsula businesses 8. Advertise in more up-scale publications such as The New Yorker, New York Magazine, Gentlemen's Quarterly, The Atlantic, and LA Magazine Both Markets 1. Develop more attractions such as tours 2. Develop more facilities such as latte stands, etc. 3. Continue to create local goods to sell such a: & crafts 7. Fishing charters need to be expanded/marketed more aggressively 8. Expanding boating opportunities: develop simple sailboat marina as a means of selling boating in the Cook Inlet BST Associates Page 119 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four OTHER SPECIFIC TOURISM DEVELOPMENT OPPORTUNITIES cling: Mountain Biking. tial does exist for the development of tain bike trails in proximity to Seldovia. ing hiking, mining, and game trails could ed, at least initially, until other, more and more technically difficult trails could stablished. Trail development would re a commitment of time and money from groups, possibly with grant assistance and permission from the Seldovia Native ociation. — 4 on o ty The development of these mountain bike trails is not seen as the foundation for a mountain bike industry in Seldovia. Instead, it should be included as one more attraction to encourage tourists to visit the area. For, while trail biking is growing in popularity both in Anchorage and the Lower Forty-Eight, it is unlikely that cyclists would travel specifically to Seldovia to use the mountain trails unless these were special or unusual. Currently there are ample opportunities for bicycling in the Anchorage vicinity, where in summer an estimated 121 miles of bike trails are available in sites such as Kincaid Park and Hillside Park. These trails, used in winter for cross-country skiing, are groomed and maintained year-round. Other trails such as Resurrection Trail or Johnson Pass are further away from Anchorage but are noted for their excellent mountain biking conditions. nly by creating trails with special features or stablishing distinctive mountain bike event can eldovia hope to become a destination for mountain scenery and the level of difficultly of its mountains, it may be possible to lure mountain bikers to the area. Mountain bike racing is also becoming increasing popular and an event such as "The Seldovia 50 Mile Race" or "Seldy 50" might be appealing. It would be recommended, that if Seldovia wishes to attract mountain bikers, the Arctic Bicycle Club (566-0177) or the Mountain Bike Club (694-0900, Larry Disbrow, president) should be contacted for advice in trail development and attraction to draw bikers. resource hough it does appear that the lack of unique untain bike trail features, means that the tlay of time and money will not bring cient returns in the short run to justify an estment, mountain bike experts should be ntacted to 1) market the area and 2) obtain er ideas regarding attracting bikers to the ea. Ski Areas The development of a ski area outside Seldovia has been proposed in the past. To assess the potential for skiing in Seldovia, a review is provided of selected Southcentral Alaskan ski areas. There are three ski areas in the Anchorage area: Alpenglow at Arctic Valley, Hilltop Ski Area, and Aleyska Resort. Alpenglow, 30 miles from Anchorage, is located on 500 acres, has three chairlifts, one t-bar, and two pony tows. It hosted approximately 60,000 skiers last year, an estimated 70% of which were from the Anchorage region. Hilltop, a somewhat smaller local ski area, boasts a double chairlift and a rope tow. It is estimated that 53,000 skiers used the mountain for the 1991-92 season. Aleyska Resort, the largest ski area in the Anchorage region and the state of Alaska, is Page 120 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Four less than a hour from Anchorage. Aside from the ski runs, there are three restaurants and a number of shops at the resort. In addition, there are plans for a new first class hotel at Alyeska. The City of Cordova owns a small ski area named Mount Eyak that it leases to the Sheridan Ski Club for operation. The mountain, opened for skiing in 1974/75, has a vertical lift of 1,000 feet and is served by a single rope tow chairlift. Mount Eyak is opened thee days per week and is used almost entirely by the estimated 400-500 skiers who live in Cordova and the surrounding area. Until this year, the City of Valdez managed a small ski operation with a single cable poma tow for the use of city residents. The facility was not a commercial venture since it did not charge a fee. The heavy snow fall in the area, reaching upwards of 300 feet a year, necessitated a _ significant amount of maintenance such as shoveling and grooming which proved to be beyond the financial resources of City. To keep within an annual budget of $40,000, volunteers were recruited for the past two years to aid in running the operation. Volunteer support waned to the point that the mountain was open only nine days last year. And, while liability insurance, although consuming 30% of the budget ($12,000), was apparently not a factor in the area's closing, the ski area was recently closed due to litigation following a personal injury suit. Given 1) the substantial cost that development of a ski area would entail, 2) the competition from existing areas, and 3) Seldovia's distance from Anchorage, the construction of a ski area does not appear to provide Seldovia with a realistic opportunity for economic development. Fishing Charters Seldovia could support more fishing charter operations as tourism increases. Local boats could definitely play a role in this development. Day Tour Vessels All of the vessels currently operating between Homer and Seldovia are based in Homer. A Seldovia based boat could be engaged in this trade if properly marketed. One way to encourage this would be to work in conjunction with local bed and breakfasts. Air Charter Tours Gulf Air operated a very successful $99 excursion in conjunction with Annie McKenzie's Boardwalk Hotel. This tour appears to be cancelled in the upcoming year. Other members of the hospitality industry should consider continuing this program. Museum Seldovia has a wonderfully rich historical past. A museum should be developed to illustrate the historical development of the town. Redevelopment of the boardwalk is also very important in this effort. Art and Crafts Seldovia has an excellent artist and artisan community. Efforts to promote local artists should be encouraged. As tourism increases, more shops should be opened. In addition, a gallery featuring local artists at work should be considered. BST Associates Page 121 City of Seldovia CHAPTER FIVE FISH PROCESSING AND MARICULTURE Seldovia Economic Development/Tourism Study Chapter Five FISH PROCESSING AND MARICULTURE Fishing and fish processing have long been a mainstay of the economy of Seldovia. In recent years, fish processing has fallen on hard times, as the John Cabot plant closed down. However, there is cause to be optimistic about the future prospects of fish processing in Seldovia. The following chapter examines the opportunities for fish processing and mariculture. Fish Buyers Taxable sales by fish buyers in the Kenai Borough exceeded $2.0 million in 1990 and then fell to $1.5 million in 1991 and 1992. Much of the decrease has come about because In Seldovia, fish buyers purchased $40,000 of fish in 1990 and increased purchases to nearly $60,000 in 1991. The demise of the cannery virtually eliminated fish buying in Seldovia. Fish Processing In the 1940s and 1950s, there were reportedly 4 salmon canneries and 3 crab packers in Seldovia. The damage from the earthquake coupled with the reduced crab harvest, reduced the number of canneries to 2 in recent years. At the present time there are 2 canneries in the City (ie. the John Cabot plant and the of the turmoil in the salmon market with | Seldovia Native Association plant). These falling prices, large harvests, the recession in | facilities are described below. Japan and increasing competition from farm raised salmon. Table 5-1 Fish Buyer Area Year 1Q - 3Q 4Q Total Seldovia 1990 $21 $32,112 $8,401 $0 $40,534 Borough 1990 $139,464 $848,489 $916,558 $116,794 $2,021,305 Seldovia % of Borough 0.0% 3.8% 0.9% 0.0% 2.0% Seldovia 1991 $16,611 $40,392 $2,749 $35 $59,787 Borough 1991 $178,569 $659,105 $610,595 $86,404 $1,534,673 Seldovia % of Borough 9.3% 6.1% 0.5% 0.0% 3.9% Seldovia 1992 Q1-3 $71 $117 $208 $0 $396 Borough 1992 QI-3 $168,686 $512,542 $873,301 $0 $1,554,529 Seldovia % of Borough 0.0% 0.0% 0.0% NA 0.0% Source: Kenai Peninsula Borough Finance Department, BST Associates BST Associates Page 122 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five John Cabot Plant The John Cabot plant is located at the northern end of the City approximately 400 feet from Main Street and 400 feet from Seldovia Bay. As a recent appraisal reports : "The upland area on which the plant is located, is estimated to comprise 109,700 square feet (2.52 acres). Adjacent, and lying in the bay, are four submerged tideland lots on which the dock is located. These lots measure 233 feet on the upland side and 143 feet on the bay side for about 47,000 square feet (or just over one acre) of submerged tidelands. "... The cold storage and processing plant is a wood frame building built about 1967 and a metal (Butler type building) addition. The total building area comprises an estimated 17,200 square feet. The building is a reasonably modern industrial plant which houses the equipment and the various components necessary to process salmon, crab and bottom fish. There are three blast freezers, one of which is new, within the building. The freezing capacity is rated at 120,000 pounds of fish per day. This year, 1991, it is reported that about 80,000 pounds of fish or less were processed. There is a fish processing area, with concrete floors (that have large floor drains for the removal of waste) and the glaze areas. There is also a mechanical room and boiler room which houses the compressor and boiler equipment. In addition, there is a storage area, an equipment shop and gear room. Adjoining the main shop building is a metal warehouse for storage. Also adjoining are the offices, employees locker, lunch area and the men's and women's bathrooms. "... The plant freezes and processes salmon, halibut, herring, Tanner and Dungeness crab, occasionally some shrimp and is encouraging the fleet of fishermen to gear for bottom fishing which it is processing on a small scale..." [Source: Appraisal of The John Cabot Fish Processing Plant in Seldovia Alaska dated October 14, 1991 by McCrackin Appraisal Group, Inc]. The John Cabot plant was acquired in 1983 by Sea Galley for $2.6 million. However, Sea Galley had a financial setback due to the bankruptcy of a subsidiary (Flaky Jake's restaurants) and sold the plant to John Cabot for $670,000 plus a requirement to provide crab and fish to the restaurant at production cost for three years. The estimated full price of acquisition was $1 million (in dollars and product). John Cabot cannery operated the plant until 1991 when it closed the plant and filed for bankruptcy. As many as 60 people were employed at the plant, of which about two-thirds were from outside Seldovia. The average wage was reported to be $6 per hour. The plant was a very significant part of the economy of the City and has been sorely missed. Shortly after the closing of the plant, John Cabot officials enlisted the services of a real estate agent in Anchorage to sell the facility. At the initial asking price, there was little interest in the plant. An appraisal of the plant was conducted in October 1991 which set the value of the plant and equipment at $700,000. The realtor was unable to successfully generate any interest in the plant. As a consequence, the Royal Bank of Canada acting for one of its clients who was a large creditor of the plant began to seek an auction sale through the US District Court in Anchorage. Initial efforts to auction the BST Associates Page 123 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five property were thwarted by the lack of title to equipment. On December 4, 1992, the plant and equipment was sold to Dr. Stokes owner of North Pacific Seafoods, Inc for $300,000. North Pacific, which owns several vessels in Kodiak and Eureka, California, intends to add significantly to the processing plant in terms of capital equipment. The firm is well connected with markets throughout the world due to its other ventures. It is proposing to develop the plant in value-added fisheries (discussed below). Seldovia Native Association The Seldovia Native Association plant which has been vacant for over ten years has an asking price of $855,000 according to the John Cabot appraisal. It may be possible for this plant to assist in value added processing with the John Cabot plant. Opportunities for the Plant It is too early to tell what the new owners intend to do with the John Cabot plant. However, discussion with other processors and North Pacific indicate that the plant will continue to process salmon as well as other species while more emphasis will be placed on value added products. A recently completed study _ entitled "Value-Added Seafood Processing in Alaska : Practical Opportunities" (prepared for the Southwest Municipal Conference by Pacific Associates in March 1992, has several ideas on the opportunities for value added processing in the Cook Inlet area, such as : = Salmon - high opportunities for steaking/portioning, smoking, grading and other processing; medium opportunities for mincing = High opportunity for halibut steaking/portioning = High opportunity for herring roe extraction = High opportunity for small specialty producers engaged in smoking and canning These opportunities will be tested by the new owners depending upon prices, capital plant costs and resource availability. While it is still too early to tell, the acquisition of the plant and intention to operate are very good news for the City of Seldovia. The development of the plant will be driven by market forces. Discussions with owner representatives indicate that the plant could be involved in round cod, fillet blocking of cod, salted cod, smoked black cod, smoked salmon among other products. The owners estimate that the local employment at the cannery would be approximately 15 to 35 people working year around. The payroll could range from $480,000 to $1.2 million per year. In addition, the owners are interested in buying as much of the fish as possible from the local fleet. However, this may require changes in gear and fishing patterns. Local fishermen have expressed their interest in providing fish to the cannery. This will further assist the local economy by increasing fuel and other sales in Seldovia as well as decreasing the cost of transportating products to Homer. BST Associates Page 124 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Table 5-2 Regional Value-Added Opportunities for Salmon Steaking/ Pink Portioning Mince Fillets Smoking Grading Surimi Other Southeast High High High High High Low High Prince William Sound High High High High High Low High Cook Inlet High Medium Low High High Low High Kodiak High High High High High Medium High Aleutians East High Low Low High High Low High Aleutians West Low Low Low Low Low Low Low Bristol Bay Low Low Low High Low Low Low Bering Sea Coast Low Low Low High Low Low Low Pribilofs Low Low Low Low Low Low Low Other refers to microwavable pouches and other similar activities. Source: "Value-Added Seafood Processing in Alaska: Practical Opportunities" (prepared for the Southwest Municipal Conference by Pacific Associates in March 1992 Table 5-3 Regional Value-Added Opportunities for Halibut, Herring and Pacific Cod Halibut Pacific Cod Steaking/ Herring Roe \ Portion Fillets Extraction Salt Cod Other Cod Southeast high low high low low Prince William Sound high Low high low law Cook inlet high low high low low Kodiak high low high high high Aleutians east low low high high high Aleutians west low low medium high high Bristol bay low low medium low medium Bering sea coast low low medium high high Pribilofs Low Low Low High High Source: "Value-Added Seafood Processing in Alaska: Practical Opportunities" (prepared for the Southwest Municipal Conference by Pacific Associates in March 1992 BST Associates Page 125 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Table 5-4 Regional Value-Added Opportunities for Specialty Producers, Underutilized Species, Meal and Oil, and Crab Small Specialty Producer Underutilized Species Crab Arrowtooth Sectioning/ Smoked Canned Flatfish Snail Surimi Meal/OII Grading Southeast High High Low Medium Low Medium Low Prince William Sound High High Low Medium Low Medium Low Cook Inlet High High Low Medium Low Medium Low Kodiak High High High Medium High High Medium Aleutians East High High High Medium High High Medium Aleutians West High High High Medium High High High Bristol Bay High High Medium Medium Low Medium Low Bering Sea Coast High High Low Medium Low Low Low Pribilofs Low Low High Medium Medium High High Source: "Value-Added Seafood Processing in Alaska: Practical Opportunities" (prepared for the Southwest Municipal Conference by Pacific Associates in March 1992 Mariculture Marine aquaculture or mariculture is defined as the farming of marine finfish, shellfish, crustaceans, and seaweed as well as the ocean ranching of anadromous fish. International Trends While mariculture has been practiced as long as farming on land, it only contributes a minor share of food and other products. According to the UN Food and Agricultural Organization (FAO), total world fish production was 98 million metric tons in 1988. Of this total, mariculture contributed 14 million metric tons. Nearly 84% of the total production occurs in Asia. North American production accounts for only 3 percent of the world production. Of the roughly 300,000 metric tons of product grown for food in the US, approximately 75% were freshwater species. There were approximately 75,000 tons of salt water mariculture products raised in the US in 1988 and of these 80% were oysters which have grown into a $50 million business. Other than oysters, all products are in the very early stages of commercial development. BST Associates Page 126 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Table 5-5 World Aquaculture Production 1988 (million metric tons) Region Finfish Crustaceans Mollusks Seaweeds Total Percent Africa 0.07 0.07 0.5% North America 0.30 0.03 0.10 0.43 3.0% Latin America 0.04 0.10 0.05 0.02 0.21 1.5% Europe 0.50 0.60 1.10 1.71% USSR 0.40 0.40 2.8% Near East 0.03 0.03 0.2% East Asia 5.00 0.30 2.00 3.50 10.80 754% West Asia 1.00 0.10 0.10 0.08 1.28 8.9% Total 7.34 1.13 2s 3.60 14.32 100.0% Percent 51.3% 7.9% 15.7% 25.1% Source: Food and Agriculture Organization Oyster production has decreased substantially in the East Coast (primarily Chesapeake Bay) from 27.4 million pounds in 1968 to 7.6 million pounds in 1988. This was due primarily to excessive harvesting and water quality problems. Although traditionally boasting very large harvests, the Gulf of Mexico has also experienced a decrease in oyster production - from 26.7 million pounds in 1968 to 16.3 million pounds in 1988. At the same time, the Pacific Coast increased from 7.8 million pounds (1968) to 10 million pounds (1988) and now accounts for 29.5% of total US oyster production. On the Pacific Coast, Washington state is a leader in aquaculture production, accounting for 4 out of 5 oysters produced. Washington State oyster production exceeded 1,000,000 gallons in 1990. Washington State markets 83 percent of its product outside of the state (27% in Oregon and Washington, 55% in the rest of the US and 1.3% in foreign countries.) [Source: The Economic Impact of the Oyster Industry prepared for the Willipa Grays Harbor Oyster Grower's Association by Richard Conway, May 1991]. The Washington oyster industry had total sales estimated at $36.9 million in 1990 and employed 1,000 direct workers. However, Washington State is experiencing an infestation of ghost and mud shrimp which jeopardize the viability of future oyster production in Grays Harbor and Willipa Bay. Currently sevin is sprayed to control the shrimp that borrow into the mud covering and retarding oyster growth. In addition, some of the oyster growers in Puget Sound have been experiencing water quality problems. Siting aquaculture floats in Puget Sound has become very contentious due to aesthetics and neighbor concerns. BST Associates Page 127 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Table 5-6 US Mariculture Production 1988 Production Percent Metric of US Value Percent Species Tons Metric Tons ($ Million) of US value Freshwater Catfish 155,000 53.6 265 49.2% Crayfish 30,000 10.4 25 4.6% Trout 25,000 8.6 65 12.1% Striped Bass 450 0.2 2 0.4% Bait/Omamental fish 75 13.9% Alligators 20 3.7% Subtotal 210,450 72.7 452 83.9% Marine Oysters 63,000 21.8 50 9.3% Clams 8,000 2.8 10 1.9% Mussels 4,000 14 2 0.4% Salmon 3,000 1.0 2 4.1% Shrimp 1,000 0.4 3 0.6% Subtotal 79,000 27.3 87 16.1% Total US 289,450 539 Total World 14,000,000 22,500 US % of world 2.1% 24% Source: Food and Agriculture Organization Opportunities In 1984, blue mussel mariculture was started at Halibut Cove by Otter Seafarms (James and Nancy Hemming) using longline culture systems. In 1984, approximately 410 pounds were harvested. The lessons learned from Otter Seafarms were: = A good mussel mariculture site should include : close proximity to large populations of wild mussel seed stock. protection from heavy wave action no winter ice excellent water circulation nutrient and plankton rich waters excellent water quality proximity to transportation to market = Locations for blue mussel mariculture installations must be in areas where no pollutants from industrial sources (including fish processing), domestic sewage or petroleum products exists. The requirements for excellent water quality impact all forms of aquaculture development [Source: Otter Seafarms, Bay Mussel BST Associates Page 128 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Mariculture in Kachemak Bay, Alaska by James and Nancy Hemming]. Since 1984, aquaculture in Alaska has increased significantly but still remains at a early stage of development. A major turning point was the enactment of new laws and_ regulations permitting aquaculture by the State of Alaska in 1989. While the state prohibited raising finfish, it allowed other aquatic farming. In 1990, there were reportedly 90 permit applications with 28 permits issued and 26 in a pending _ status. In 1990, the Alaska Department of Fish and Game (ADFG) estimated the sales from aquatic farms to be $77,225 including $3,718 from mussels. Most of these sales came from two farms (i.e. one in southeast and one in Prince William Sound). Based upon forecasts by ADFG, oyster production could reach $1.8 million by 1994. [Reported in Strategies for Development of Mariculture in Alaska by Steve Horn and Eric Downey, December 1991]. There were 5 permits in Jakolof Bay, 9 in Halibut Cove and one each in Kasitsna Bay and Little Jakolof Bay that last through August 1994. In addition, 7 permit applications were received in 1992 for Kachemak Bay. Oyster production has been dealt a setback at the present time. Oyster spat for production in Alaska has been received from two Puget Sound oysters farms certified by the State of Alaska. The larger of the farms has reported that it can not supply spat to Alaska because of production problems. However, plans are being discussed now to develop an upwelling nursery system in Alaska to produce all spat required by the industry. Impact on Seldovia Mariculture is in its very early stages of development in Kachemak Bay. However, it appears that initial ventures are proving successful. Most of the activity that will impact Seldovia is occurring in Jakolof Bay. Seldovians are becoming involved in the business (e.g., Fred Elvsaas of Seldovia Native Association). Others may choose to become involved as well. It should be emphasized that aquaculture is a risky business requiring a good deal of labor intensity. Those citizens who are interested should be made aware of research being undertaken by the Kenai Peninsula Economic Development District (EDD). The EDD is evaluating markets, means of resolving issues between aquaculturists and seiners and means of forming an association. In addition, the EDD is promoting development of a Mariculture Technical Center that would support research and a private oyster hatchery. The EDD can assist in making interested parties aware of how to become involved in the business. It is not known if Seldovia Bay is a potential area for aquaculture development. As a consequence, production will probably not occur in the City limits. It is however possible that the John Cabot cannery and/or the SNA cannery could be used to shuck and process oysters, mussels, clams and other products for the market. BST Associates Page 129 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Table 5-7 Status of Mariculture Permits in Kachemak Bay Critical Habitat Area August 14, 1992 Location Name ADL # Acreage Species Jakolof Bay Banta/Hemming 225228 2 Oysters, mussels exp. 4/30/94 scallops, clams Jakolof Bay A. and C. Bess 225298 ' 4 oysters, mussels, exp. 4/30/94 urchins, sea Jakolof Bay Fred Elvaas 225227 cucumber, kelp exp. 4/30/94 scallops Jakolof Bay Samer-I Seafoods 225256 5 mussels, oysters (D.L. McCubbins) _ exp. 4/30/94 Jakolof Bay B. and L. Paine 225271 2 mussels appln. revd. Litle Jakolof Bay Donald Bell 225560 3 oysters, clams, appln. revd. scallops, Kasitsna Bay Robert Bason 225573 mussels, etc. exp. 4/30/95 1 oysters Halibut Cove Mark Bradley 225564 apln. revd. 1 Halibut Cove Kevin Sidelinger 225552 appln. revd. 5 mussels, oysters Halibut Cove Lagoon Joe Banta KA 53 exp. 6/22/95 TBD Halibut Cove Lagoon Mark Bradley KA 30 3 exp. 6/22/95 2.9 blue mussels, Halibut Cove Lagoon ’ Jim Branson/ KA 94 oysters Nancy Monroe exp. 6/22/95 blue mussels Halibut Cove Lagoon Brenda Hayes KA 29 K. Kuletz/ exp. 6/22/95 blue mussels Halibut Cove Lagoon R. Atkinson KA 93 Kathy McNevin exp. 6/22/95 blue mussels Halibut Cove Lagoon KA 52 Kevin Sidelinger exp. 6/22/95 blue mussels Halibut Cove Lagoon Diana Tillion KA 61 exp. 6/22/95 blue mussels Source: Kenai Peninsula Economic Development District BST Associates Page 130 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Five Table 5-8 . Mariculture Permit Applications Received 1992 in Kachemak Bay as of July 22, 1992 Location Name ADL # Acreage Species Halibut Cove Brian Miller 225884 3) Pacific oysters, blue mussels Halibut Cove Robert Halpin 225871 3 Pacific oysters, blue mussels Kasitsna Bay Hemming/Banta 225890 4 Pacific oysters, blue mussels Kasitsna Bay M. Bess 225879 3) blue mussels Herring Island G. Donart 225867 4 Pacific Oysters, blue mussels, weathervane scallops Cronin Island D. Bess 225862 2 Pacific oysters, blue mussels China Poot Bay D. and D. Scheer 225878 6.18 Pacific oysters, blue mussels, eathervane scallops, rock and pink scallops, kelp Source: Kenai Peninsula Economic Development District The following mariculture permit applications in Peterson Bay are suspended pending reconsideration by the Commissioner of Fish and Game over denial of required Department of Fish and Game Special Area Permits and Aquatic Farm Operation Per Robert Hartley, ADL 225547; Gary Seims, ADL 225561; and Ronald Bader, ADL 225563. _— BST Associates Page 131 City of Seldovia CHAPTER SIX FOREST PRODUCT PROCESSING OPPORTUNITIES Seldovia Economic Development/Tourism Study Chapter Six FOREST PRODUCT PROCESSING OPPORTUNITIES The major opportunities for forest product processing include the sale of three primary products: raw logs, lumber and chips primarily to foreign buyers (mainly Japanese and other Far Eastern countries). Recent trends of these are examined below. Log Exports Log exports have come increasingly under attack in order to preserve wildlife habitat. Efforts to protect the spotted owl, marbled murelet and other species have removed extensive tracts of public and private lands from harvesting. This has caused a significant decline in log exports from Washington, Oregon and California. In some areas, log exports have declined by as much as 50%. Efforts to limit or ban log exports from private lands are also being considered in several state legislatures which would further decrease log exports. The demand for logs has softened somewhat in the last year due to the international recession. However, demand is not the constraining factor. Supply is now the main constraining feature controlling log exports. Alaska has been responsible for between 15% and 16% of total log exports from the west coast of North America. Most of these logs have come from Southeast Alaska from Native Corporation lands. A great share of these lands have been fully harvested during the past few years. Lumber Exports Western US lumber exports totalled 1.7 million board feet in 1991. Most of this lumber went to Asia, primarily Japan. Alaskan exports accounted for between 8% and 11% of total US west coast exports. Most of this was from southeast sawmills. However, due mainly to the international recessionary impact on lumber markets, three mills in Klawock, Haines and Seward, Alaska were closed in 1991. In Seward, new partners have been found with savvy in lumber manufacture and marketing and the mill is being reopened. Numerous mills have been shut throughout the states of Oregon, Washington and California because of reduced supply of logs. Adequacy of supply of logs is still the major constraining feature that will impact the future of lumber processing in the western US including Alaska. BST Associates Page 132 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Six Table 6-1 West Coast Log Export Summary Million Board Feet Area 1990 % 1991 % 1992 6mos % Washington 2,349 62.7% 2,066 62.0% 967 63.9% Oregon 550 14.7% 498 15.0% 168 11.1% California 101 2.7% 69 2.1% 4 0.3% Alaska 569 15.2% 528 15.9% 255) 16.9% British Columbia 178 4.8% 169 5.1% 119 7.9% Total 3,747 100.0% 3,330 100.0% 15513) 100.0% Note : US data in scribner log scale, BC in BC log scale Source: USFS/Dept of Commerce, Jones Stevedoring, Paul Ehinger & Associates Table 6-2 Lumber Exports Million Board Feet Area 1989 % 1990 % 1991 % Washington 999 45.5% 887 47.5% 757 44.5% Oregon 934 42.6% 693 37.1% 668 39.3% N. California 71 3.5% 75 4.0% 111 6.5% Alaska 184 8.4% 212 11.4% 165 9.7% Total 2,194 100.0% 1,867 100.0% 1,701 100.0% Note : US data in scribner log scale, BC in BC log scale Source: USFS/Dept of Commerce, Jones Stevedoring, Paul Ehinger & Associates Table 6-3 Mill closures in California, Washington, Idaho and Oregon Number of Mills Plywood/Panel Combined Year Sawmills Veneer Sawmill/Panel 1988 15 7 22 1989 18 24 1990 30 21 51 1991 31 14 45 1992 * 15) 24 * Through September, 1992 Source: Paul Ehinger & Associates BST Associates Page 133 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Six Chip Exports Chips are typically created as a residual byproduct of lumber processing or as a primary utilization of smaller pulpwood which is chipped either in the forest or at the point of export. Western U.S. chip exports have remained fairly constant at 3.3 to 3.4 million tons over the past few years. However, these levels are far below the levels of the mid and early 1980s when chip exports exceeded 6 million tons. Much of the chips are sold to Japan, Korea and Taiwan for pulp and paper manufacture. There are opportunities for chip exports, but, again, the issue focuses on the adequacy of supply of logs and pulpwood. Ownership Issues The forests in the Borough are primarily Western Hemlock and Sitka Spruce. The total area of the Kenai Peninsula Borough is approximately 16 million acres, with land area of 10 million acres. Of this, approximately 2.2 million acres are forested and 646,000 acres are commercial forest land. The Kenai Peninsula Borough Economic Development District (EDD) has recently begun feasibility studies to evaluate markets for the trees impacted by the spruce bark beetle. One of the initial studies aimed to determine the ownership of the commercially available forest resource. | Approximately 423,000 acres could be commercially harvested. outside the Kenai National Wildlife Refuge, Kenai Fjords and Lake Clark National Parks. Of this total, the Borough owns 30,000 acres, the state 99,000 acres, native corporations own 195,000 acres and other private owners have 20,000 acres. An additional 79,000 acres may possibly be commercially harvested in the Chugach National Forests. The Seldovia Native Corporation (SNA) owns approximately 50,000 acres which is composed of 60% spruce, 30% birch and 10% aspen/birchwood. Much of the area is currently not accessible by road and none of the resource is impacted by the spruce beetle. Marketing Issues The EDD has focused its attention on developing markets for the spruce beetle impacted timber north of Kachemak Bay. There are seven priority harvest areas including 43,390 acres near the Fox River Valley and Tustumena Lake as well as the Falls Creek area in Ninilchik and other south Peninsula areas. The EDD strategy includes developing a Reforestation Center and Nursery fully staffed with a Silviculturalist, Fisheries and Wildlife Biologist, Fire Control Specialist and other team members. The EDD proposes to pool resources owned by the Borough with those owned by the University of Alaska, ignoring for the moment federal and private owned lands. Markets for logs, chips and products are being evaluated at the present time. Much of the product would likely be exported via the Homer dock. SNA's plans are not known at the present time. Any plans to develop the resource would be beyond the control of the City of Seldovia. Development of the resource south of Kachemak Bay could provide employment but it is at too early a stage to estimate its chances of success. BST Associates Page 134 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Six Table 6-4 Chip Exports Short Tons (1,000s) - Area 1989 % 1990 % 1991 % Washington 801 23.0% 744 22.8% 681 20.1% Oregon 2,252 64.7% 2,081 63.7% 2,141 63.2% California 339 9.7% 413 12.6% 463 13.7% Alaska 86 2.5% 28 0.9% 101 3.0% Total 3,478 100.0% 3,266 100.0% 3,386 100.0% Note : US data in scribner log scale, BC in BC log scale Source: USFS/Dept of Commerce, Jones Stevedoring, Paul Ehinger & Associates Table 6-5 ; The estimated Ownership and Volume of the Available and Possible Commercial Forest Land - Entire KPB Owner Area-CFL % Volume Acres MMBF KPB 30,000 9% 255 State 99,000 29% 795 ANCSA 195,000 57% 1,752 Other Private 2,000 5% 207 TOTAL Available 344,000 100% 3,009 Chugach NF - Possible 79,000 641 GRAND TOTAL 423,000 100+% 3,650 Available + Possible Note: CFL in Kenai National Wildlife Refuge and Kenai Fjords-Lake Clark National Parks not included. Source: Kenai Penninsula Borough Economic Development District, Inc. BST Associates Page 135 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Six Log Homes However, one specialty product that can be developed in Seldovia is log homes. The market to Japan and other countries is remaining strong and could be tapped using Seldovia's talented log home builders. As the following table illustrates there are numerous shipments of log homes to Japan by a variety of west coast manufacturers. Exports of log homes should be further evaluated. BST Associates Page 136 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Six Table 6-6 Exports of Log Homes to Japan January through March 1992 COMMODITY NAME CITY STATE POUNDS CHILDRENS LOG HOUSE REAL LOG HOMES MISSOULA MT 159,960 CHURCH CAMP LOG HOME SILVER STAR SHPG CARSON CA 32,000 COMPLETE LOG HOUSE KITS P K PACIFIC ENTERPRISE OR 45,370 KD BUILDING LOG HOME SEA HORSE CONTAINER LINE JAMAICA NY 27,000 KD LOG HOME MITRANS SEATTLE WA 60,173 KD LOG HOME SKAGIT VALLEY LOG HOMES BELLINGHAM WA 50,184 KD LOG HOME SKAGIT VALLEY LOG HOMES BELLINGHAM WA 21458 KD LOG HOME SKAGIT VALLEY LOG HOMES BELLINGHAM WA 85830 KD LOG HOME KIT P K PACIFIC ENTERPRISE OR 32940 KD LOG HOME KIT SMOKEY POINT LOG HOMES ARLINGTON WA 138891 KD LOG HOMES CALINEX GARDENA CA 43600 KD LOG HOMES CALINEX GARDENA CA 139200 KD LOG HOMES MUR FREESBORO TN 185608 KD LOG HOME SUREFIT LOG HOMES VANCOUVER BC 81570 KD LOG HOME SETS WILLIAM D NEATER KILA MT 40439 KD LOG HOMES KITS NATIONAL LOG CONST THOMPSON FLS MT 33380 KNOCK DOWN LOG HOUSE IDEAL EXPORTS SALMON ARMS BC 43610 KNOCK DOWN LOG HOUSE IDEAL EXPORTS SALMON ARMS BC 78801 KNOCK DOWN LOG HOUSE IDEAL EXPORTS SALMON ARMS BC 40470 KNOCK DOWN LOG HOUSE IDEAL EXPORTS SALMON ARMS BC 47850 KNOCK DOWN LOG HOUSE IDEAL EXPORTS SALMON ARMS BC 42470 KNOCK DOWN LOG HOUSE IDEAL EXPORTS SALMON ARMS BC 75400 KNOCK DOWN LOG HOUSE KEEKO LOG HOMES BC 86281 KNOCK DOWN LOG HOUSES RON KUNTZ THOMPSON FLS MT 29000 LOG HOME KIT AMERLINK ROCKY MT NC 40000 LOG HOME KIT PRECISION CRAFT LOG MERIDIAN ID 40150 LOG HOME KIT SUPER EXPRESS COMPTON CA 67000 BST Associates Page 137 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Six Table 6-6 (Continued) COMMODITY NAME cIry STATE POUNDS LOG HOME PARTS MWTC VANCOUVER BC 79366 LOG HOME PARTS ROCKY POINT LOG HOMES MONTE CREEK BC 41226 LOG HOME PARTS ROCKY POINT LOG HOMES MONTE CREEK BC 0 LOG HOME SETS TRANS PACIFIC SERVICE INGLEWOOD CA 83981 LOG HOUSE P K PACIFIC ENTERPRISE OR 37665 LOG HOUSE P K PACIFIC ENTERPRISE OR 3400 LOG HOUSE REAL LOG HOMES MISSOULA MT 97819 LOG HOUSE CUSTOM DESIGN KOTOBUKI S SAN FRNCSCO CA 48080 LOG HOUSE KIT SUMITRANS SEATTLE WA 178585 LOG HOUSE PARTS SUMITRANS SEATTLE WA 17832 LOG HOUSE PARTS SUMITRANS SEATTLE WA 35718 LOG HOUSE PARTS SUMITRANS SEATTLE WA 85460 LOG HOUSE PARTS SUMITRANS SEATTLE WA 19965 PART OF LOG HOME KIT AMERLINK ROCKY MT NC 20000 PREFAB LOG HOME SARIS TRDG SEATTLE WA 81760 PREFAB LOG HOUSE SARIS BUILDING SUPPLY SEATTLE WA 79460 PREFABRICATED LOG HOUSE PAC M INTL BELLEVUE WA 99930 BUILDING LOG HOME MATERIALS _ WILLIAM D NEATER KILA . MT 53700 Source: New York Journal of Commerce, BST Associates cE BST Associates Page 138 City of Seldovia CHAPTER SEVEN COTTAGE INDUSTRY AND ARTS & CRAFTS COTTAGE INDUSTRY AND ARTS & CRAFTS business or work activities. Seldovia's Description of Cottage Industry The designation cottage industry (and arts and crafts) cover a wide variety of products: paintings, water colors, and other fine arts and prints; craft and hobby kits; greeting cards; jewelry; etc. Crafts may include any item made of wood, glass, metal, fiber, plastic or any other type of materials and can cover needlepoint, novelty items, toys, decorations and other items. There are numerous types of arts and crafts that can be produced in Seldovia. Products with an Alaskan orientation would, of course, be the most obvious, especially if the target market is the tourist trade or the Lower Forty-Eight. For example, crafts with a Russian motif that capitalize on Seldovia's history may prove salable. While a great deal goes into the establishment of an arts and crafts business (production, pricing, business plans, legal and accounting support), this section will primarily focus on the marketing of these goods. The development of an arts & crafts business, especially one suited for operation out of one's home is ideally suited for Seldovia households. There is generally a need for only a relatively small initial capital outlay and overhead can be held to a minimum. Much of production can occur in winter, which is typically a slow season for other Seldovia business activities, e.g., fishing and tourism. It is a means to augment existing income. Only one member of the household need become involved in the business, freeing others to continue in existing distance from large population centers need not prove an insurmountable obstacle, since uses of the US mail (i.e. bulk rates) can serve to lower shipping costs. Marketing is the Key Direct retailing to tourists visiting Seldovia is one method of reaching potential customers. Of course direct retailing during the summer may prove lucrative but the time to sell these goods is very short. Efforts should be undertaken to maximize the draw from tourists in the peak season as well as to find other markets during off-peak seasons. The Fourth of July celebration could be used to capitalize on the large number of visitor to Seldovia. The City, in cooperation with local producers, could sponsor an Alaskan Arts & Crafts Festival to coincide with the celebration, obtaining participation from local and non-local crafts people. The festival could expand tourism and develop the Seldovia arts and crafts sector at the same time. Moreover, participation in arts and crafts shows, fairs, and festivals in Anchorage or elsewhere in the US would provide a direct outlet for one's work. There are an estimated 10,000 such exhibitions held in the US annually. Barbara Brabec Productions (P.O. Box 2137-HMM, Naperville, IL 60567-2137) offers for $3 a list of subscription periodicals that contain information on festivals, arts and craft shows, flea markets, and mall shows. BST Associates Page 139 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Seven Mrs. Brabec's book Homemade Money ($21.95 by mail from the same address) is an excellent source of ideas about arts & crafts and other home businesses; much of this section is based upon ideas and information from her book. Another source for information on fairs and shows is American Craft Enterprises, Inc., the marketing arm of the American Craft Council (72 Spring Street, New York, NY. 10012). The ACC is a professional association designed to meet the needs of artists, designers, and craftspeople; they can be reached at 800-724-0859. American Craft Enterprises sponsors an annual show where prospective participants must submit their work in advance to gain access to the event. While the arts and crafts target market should include the tourists visiting Seldovia in the summer, a far larger potential market resides in Anchorage and the Lower Forty-Eight. However, to reach these customers, business in Seldovia will have to wholesale their products through a variety of different distributors. The distribution channels serving these markets include retail outlets such as gift shops and other speciality stores, galleries, bookstores, museum shops, and department stores. Mail order catalogs are another means of distribution. Finally, industrial trade shows, fairs, exhibitions, or merchandise marts are all means to reaching retailers. There are a variety of ways to connect with retail outlets that sell arts and crafts. In the case of gift shops, boutiques and similar speciality stores, magazines such as Gift & Tableware Reporter (Billboard Publications Inc., 1515 Broadway, New York, NY, 10036) and Gift & Decorative Accessories (51 Madison Ave., New York, NY 10010), which in addition produces an annual directory listing manufacturers, distributors, trade shows and similar information, can provide an entree into this segment of the retail market. The names and addresses of craft shops and galleries may be obtained from ads in publications like The Crafts Report, a monthly marketing and business newsletter for craft professionals (700 Orange St., P.O. Box 1992, Wilmington, DE 19899) or Craft Marketing News (The Front Room Publishers, P.O. Box 1541, Clifton, N.J. 07015). The latter also Table 7-1 Arts & Crafts 1Q 2Q 3Q 4Q Total Seldovia 1990 $1,125 $4,208 $5,794 $4,045 $15,172 Borough 1990 $975,215 $2,181,230 $3,291,366 $2,310,880 $8,758,691 Seldovia % of Borough 0.1% 0.2% 0.2% 0.2% 0.2% Seldovia 1991 $1,351 $4,112 $9,614 $4,817 $19,894 Borough 1991 $1,486,601 $2,390,207 $3,541,121 $2,375,308 $9,793,237 Seldovia % of Borough 0.1% 0.2% 0.3% 0.2% 0.2% Seldovia 1992 Q1-3 $2,013 $10,577 $21,561 $0 $34,151 Borough 1992 Q1-3 $1,642,003 $2,424,921 $3,726,754 $11,535 $7,805,213 Seldovia % of Borough 0.1% 0.4% 0.6% 0.0% 0.4% Source: Kenai Peninsula Borough Finance Department, BST Associates BST Associates Page 140 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Seven publishes the free Learning Extension Catalog and marketing directories such as the Directory of Shops & Galleries and the Directory of Seasonal Holiday Craft Boutiques. Marketing to galleries and other buyers of both fine and commercial art may be made more accessible through the Artist's Market (North Light Books, 1507 Dana Ave., Cincinnati, OH 45207), an annual directory listing over 2,500 potential customers such as magazine publishers, advertising agencies, greeting card companies and so forth. For those interested solely in greeting cards, the Greeting Card Association (1350 New York Ave., N.W., Washington, D.C. 20005) publishes Artists and Writers Market List which contains names, addresses and guidelines of companies purchasing from free-lancers. Additional information about the art market can be obtained from the Artworld Marketing Hotline (800-383-0677) which publishes a host of directories: Directory of Galleries for the Fine Arts, Directory of Artist Associations and Exhibition Spaces, Directory of Fine Art Representatives & Corporations Collecting Art, and Directory of Art Publishers. Hobby and especially craft supply shops can be reached mainly through distributors. Profitable Craft Merchandising (News Plaza, P.O. Box 1790, Peoria, IL 61656) is a monthly magazine geared toward retailers, but which may be helpful to designers and wholesalers as well concerning how to break into the market. They also publish an annual directory, The Craft Market Handbook, that contains a great deal of information including data on distributors, manufacturers and their representatives , and wholesalers. The Hobby Industry Association of America (319 E. 54th St., Elmwood Park, NJ 07407) sponsors an annual trade show along with shows in various regions, although it is advised to make contact with distributors prior to attempting to enter these events. The needlecraft industry, distinct from the hobby and craft supply outlets, does some of its buying from manufacturers and therefore may be easier to reach by a home business. Size and Seasonality of the Industry Taxable retail sales generated by the arts and crafts industry in the Kenai Peninsula Borough totalled nearly $9.8 million in 1991 up from $8.7 million in 1990. Through three quarters of 1992, the industry exceeds $7.8 million and will likely top $10 million (See Table 7-1). In Seldovia, arts and crafts have also grown over the years from $15,000 in 1990 to nearly $20,000 in 1991 and exceeded $34,000 for the first three quarters of 1992. It should be noted here that the amounts reported include only those sales which are reported to the Kenai Borough and therefore exclude small volume sales which are not taxable as well as sales over $500. Virtually all of Seldovia's sales occur in the second and third quarter. However, the Borough's sales are strong throughout the first and second quarters. This implies that Borough artists and craftspeople are also selling products to the local community for birthdays, anniversaries and holidays (especially Christmas). Berry Harvesting The immediate environs of Seldovia are rich with wild berries: salmonberries, blue berries, and high bush cranberries. BST Associates Page 141 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Seven The salmonberries are of special interest because they are much in demand’. For food processors such as Alaska Wild Berry Products of Homer, salmonberries form the basis of its must popular products. For example, salmonberry jelly is the most popular food item for the Alaska Wilderness Gourmet, an Anchorage food processor. Part of the allure of the salmonberry is its rarity; Seldovia shares with Kodiak the distinction of being the only areas of the state to produce this resource. Recently, there has been no salmonberry harvesting in Seldovia and only a small amount of resource, on the order of a few hundred pounds, coming out of Kodiak. Therefore the food processors' claims that they would purchase and use all the salmonberries delivered to them appears believable. Much of the salmonberry resource is located on native land, although SNA is willing to grant picking privileges through the sale of a license for $25 a person for commercial pickers, free for the general public. Alaska Wild Berry Products would pay the licensing fee with a commitment of a 20 pound minimum harvest and would also pay to transport the product. The only input required to harvest the resource is a boat, since the berries fields tend to be located in isolated coves. The company would purchase’ the raw salmonberry for $2 per pound Aside from the strong demand, salmonberries offer ease of harvest; they can be picked prior to ripening and be allowed to ripen off the vine. Additional berries that could be harvested in the Seldovia area are blue berries and high bush cranberries. Strawberry cultivation may provide another potential crop for export. ' Recommendations Each artist and craftsperson must understand the risks and rewards of accessing a larger market. One method of doing this is to develop a relationship with specific retailers or to participate in a a mail order catalogue. For Alaskan products, there is a directory entitled Make it Alaskan, Inc which promotes Alaskan products and services. Other states have developed very well appointed catalogues such as the Best of Missouri's Hands publication prepared by the State of Missouri. This type of coverage would be too expensive for Seldovia's arts and crafts community unless done in conjunction with a larger (Kenai or State) group. Finally, there are numerous private mail order catalogues that could be utilized. There are definitely opportunities for further development of the cottage industry in Seldovia. The City can assist in the development by sponsoring a one or two day entrepreneurs conference with Barbara Brabec or another specialist in the field. This workshop could be coordinated as a part of phase two of the economic development grant. Elements of the workshop should include : Product pricing techniques Product line development Product presentation and merchandising Where the markets are and how to get at them ' This and much of the following concerning berries is based upon a telephone conversation with Ms. Robin Warren, accountant and manager-in-training for Alaska Wild Berry Products, Homer, Alaska, held on December 21, 1991 and Stephanie of Alaska Wilderness Gourmet, Anchorage, Alaska. BST Associates Page 142 City of Seldovia CHAPTER EIGHT MINING INDUSTRY Seldovia Economic Development/Tourism Study ChapterEight MINING INDUSTRY The following chapter reviews the potential opportunities for development of mineral resources in the area surrounding Seldovia. Included in the analysis are two mineral products, chromite ore and quarry rock. Both of these resources have been mined in the past and the rock quarry is still active. Assessment of Chromium Resources Historical Trends The Kenai Peninsula and the Chugach Mountains, together forming what geologists call the Chugach Trend, is, according to United States Bureau of Mines, the "foremost chromite-bearing region in Alaska." Within the Trend are two areas close to Seldovia, Red Mountain/Windy River and Clam Point, that contain the bulk of Alaska's chromite resources. The Bureau estimates that Chugach Trend accounts for from 65% to 82% of Alaska's chromite deposits. Red Mountain, with estimated deposits of 1,575 short tons, has the state's largest chromite concentration, by itself accounting for from 37% to 46% of the Alaska's chromium resource. The Red Mountain chromite deposits are considered the "best exposed and certainly the most explored" in the state. Because of the relative ease of extraction, knowledge of the deposits, and size of the resource, Red Mountain and Clam Point are the only sites in Alaska where chromite has been mined. A total of 30,000 short tons from both the Star No. 4 and Chrome Queen Mines at Red Mountain and from the Reef Mine at Clam Point was produced for the arms industry during World Wars I and II and the Korean War. During peace time, as late as 1976, 8,000 short tons were produced on the Kenai Peninsula and exported to Japan. The Red Mountain Star No. 4 is connected by a 10 mile road to Jakolof Bay. This mine was owned by Union Carbide. It was in production in 1955, employing 25 people and producing 600 tons of ore per week, which was shipped to a plant for milling, presumably in Juneau. A total of 33 chromite deposits have been identified at Red Mountain. The United States currently produces no chromite ore. In fact, there has been no regular mining of chromite in the U.S. since 1961. However, there is some secondary chromium production through stainless steel cap recovery. In addition there is domestic production of chromium, ferroalloys, and chemicals. Since there is no domestic production of chromite ore, the US obtains all it needs from abroad. Imports of ore reached 615,000 tons in 1988. Chromium is used by the chemical and metallurgical and refractory industries. Of the 550.1 thousand tons of chromite ore and concentrate used in the United States in 1988, a little over three-quarters or 418.9 thousand tons were consumed by the steel industry, about 80% of which went toward the production of stainless and _heat-resisting steel. Over the past few years, demand in the US. for chromite has been greatly reduced. The year 1989 was the recent high point when 560,700 tons were used. Consumption fell rapidly thereafter, due to the nation's BST Associates Page 143 City of Seldovia Seldovia Economic Development/Tourism Study . ChapterEight a RED MOUNTAIN CHROMIUM MINE (DEPOSIT) — j 012345 GULF OF ALASKA SCALE (MILES) Figure 8-1 See BST Associates Page 144 City of Seldovia Seldovia Economic Development/Tourism Study ChapterEight economic slowdown as well as the declining role of the defense industry. By 1991, domestic chromite consumption had fallen by a third to 375,000 tons. Consumption has continued to slide; usage in the first two quarters of 1992 is down by 7.6% from the same period last year. Present Mining Activities The slowdown in demand puts a damper on the potential for exploitation of Seldovia's chromite deposits. However, there is some Recent activity concerning chrome mining in the area. The North Pacific Mining Corporation, a wholly-owned subsidiary of CIRI owns the mineral rights to the Red Mountain mine and is attempting to market the mine to one of the large chromium producers. There is hope that by sometime in 1993, a decision on the mine sale will be made. North Pacific Mining has also applied to the Alaska Science and Technology Foundation for a grant to investigate the potential of using a plasma arc furnace for the smelting or beatification of chromite. This is North Pacific's second application to the Foundation and the corporation thinks it has a relatively good chance to obtain the grant. Given the low grade but relative high quality of the Red Mountain chromite, it appears that if the ore were mined it would require beneficiation or smelting to produce shipping-grade concentrates. The deposits are accessible to tidewater and to existing transportation links. If the mine were activated, it would likely produce product for use in the international automotive industry (i.e. Japan, Korea or PRC) or the chemical industry. Competition Currently, the majority of chromite ore comes from Khazakstan in the Commonwealth Independent States (formerly the USSR) in Central Asia and from South Africa. Improvements to the facilities in Khazakstan include a beneficiation plant and improvements to the rail infrastructure. This has been accomplished largely with Japanese financing. In the United States, efforts have been made to activate another mine in Montana. To date, financing has been difficult to obtain. This mine would support the domestic market if it were activated. Impact on Seldovia If the mine were activated in Red Mountain, it would have a very significant impact on the Seldovia area. The development of the complete facility could exceed $200 million. The additional jobs added could be very high. First, approximately 25 to 35 miners would be required. Second, the beneficiation plant (i.e. smelter) could employ as many as 200 people year around. In addition, a facility of this type would likely necessitate development of a marine terminal and improved ferry access in Jakolof Bay. The US Bureau of Mines conducted an economic feasibility study on the Red Mountain mine in 1985 and found that it would generate a positive but relatively low return on investment. CIRI is actively attempting to attract financial interest from potential investors. However, BST Associates Page 145 City of Seldovia Seldovia Economic Development/Tourism Study ChapterEight these efforts have been difficult to date because the size of the financing is so high, the international recession has reduced demand and competition from competing mines is great. As a consequence, the development of Red Mountain mine is still possible but faces an uphill battle. Rock & Quarry Resources Assessment of Resources The rock found in the Seldovia area and Jakolof Bay has been utilized in the past for roadwork and erosion protection projects. The bulk of the rock resource requires drilling and blasting prior to processing. Processing for aggregate typically requires some degree of crushing dependent on __ project specifications. At a processing plant, unacceptable or deleterious materials can be removed. Deleterious material is material that may prove harmful to the final product for which the aggregate is used. Crushing is needed to reduce the size of the stone or rock material to a size specified by the end user. Erosion protection rip rap materials specified in the Alaska Department of Transportation and Public Facilities Standard Specifications for Highway Construction has typically been divided into three classes. = The first requires the maximum number of stones to be within 25 to 50 pounds. = The second requires fifty percent of the stones to weigh more than 200 pounds with no more than ten percent of the stones weighing more than 400 pounds. = The third class, requires a minimum of fifty percent of the stones to weigh more than 700 pounds with no more than ten percent of the stones weighing more than 1400 pounds. The key issue related to the marketability of Seldovia rock is the rock's quality, distance from potential market opportunities (i.e., users), cost to process and transport and competition from other potential sources and suppliers. Of extreme importance in Southcentral and other parts of Alaska is the ability of rock to withstand freeze/thaw conditions without degradation. At the time of this study, we have not obtained a final specificity regarding the quality of the Seldovia rock resource. In 1984 material on Seldovia Native Association property was inspected for use on a project near Anchor River. This project required Class II Rip-Rap. Comments from the materials engineer for the Central Region of DOT regarding this material were as follows: "The rock type observed was a green to dark-green, well indurated graywacke. However, the rock faces observed were highly sheared/shattered." The shattered appearance expressed by the materials engineer may have come from the blasting operation. Visual evidence reported by the material's engineer stated that over 50% of the material would probably fail to meet Class II rip-rap specifications. Degradation and L.A. Abrasion tests were performed on the rock sample collected from the potential rip-rap source in Seldovia. State specifications required no more than 50 for the L.A. Abrasion test. A test value of this rock source was reported as 14 which exceeds the BST Associates Page 146 City of Seldovia Seldovia Economic Development/Tourism Study ChapterEight standard specification. The degradation test gave a value of 68 with a minimum allowable value of 40. The location of this source in the Seldovia area was not specifically identified in the lab results or memorandum. One source stated that Seldovia rock was provided to an Anchor Point project at approximately that time. Ownership Issues The existing rock resources located within the Seldovia area is predominantly owned by the Seldovia Native Association with subsurface rights belonging to Cook Inlet Region Inc. Additionally, Jim Hopkins owns a small quarry near Seldovia. Opportunities for Development of Resources Rock Exports The immediate opportunity for Seldovia/Jackoloff Bay rock is the erosion protection project located on the Homer Spit. Herdon & Thompson was the low bidder on this contract. The armor protection requirements for this project requires two classes of rip-rap totaling approximately 40,000 cubic yards of material. The lower Kenai River area has an ongoing demand for armor protection for erosion protection and is currently utilizing gabions for this purpose. Immediate projects were not identified for this area, although, future projects requiring significant quantities of armor protection and aggregate may provide another opportunity for Seldovia's quarry resources, The opportunity for rock export to locations north of the City of Kenai is limited because of other existing sources and the distance/cost for transportation. Several sources of relatively high quality rock exists near the Alaskan Railroad R.O.W. A source exists near Eklutna and another high quality Graywacke source exists near Spencer Glacier, south of Girdwood. The Spencer Glacier source has been tested and is reported to have excellent qualities required for ballast and armor protection. A reliable source stated that Port Graham and English Bay have a high quality source of rock located near Dog Fish Bay. However, the source requires an approximately eight mile road haul to a shore loading site. Rock demand in the Homer/Kachemak Bay area provide the highest potential opportunities for Seldovia quarry rock. One recommendation that should be given further consideration by the Seldovia Native Association is the development of a loading facility which would "potentially" enhance the ability to respond more quickly to market opportunities as they develop. Impact on Seldovia The impact on Seldovia from rock quarry exports is expected to be fairly small in terms of the number of jobs that might be developed. However, if resources are developed in a way that minimizes negative impact to other uses, rock quarry activities will continue to enhance Seldovia's economy. BST Associates Page 147 City of Seldovia CHAPTER NINE MARINE/WILDERNESS EDUCATION AND RESEARCH Seldovia Economic Development/Tourism Study Chapter Nine MARINE/WILDERNESS EDUCATION AND RESEARCH There has been citizen interest expressed in locating marine/wilderness education and research facilities in the City of Seldovia. The following chapter evaluates the opportunities for this type of economic development. Existing Facilities There are currently no marine or wilderness educational or research centers located in the city limits of Seldovia. | However, the University of Alaska Fairbanks has maintained a research and educational center at Kasitsna Bay for more than ten years. According to Dr. Ray Highsmith, the University leases the center from the National Marine Fisheries Service (NMFS). During the Exxon Valdez oil spill, the Center had approximately 8 people engaged in research on spill impacts under a contract with the Forest Service. The center now employs two individuals and is generally underutilized. Much of the supplies (i.e., fuel and other products) are purchased from Seldovia. Likewise, when the residents of the center eat out, they patronize other Seldovia businesses. Hence, they have a generally positive impact on the City. The University would like to keep the Center open but funding is extremely difficult to obtain. Part of the problem is that the State of Alaska which is responsible for funding research in coastal or inland waters has traditionally been very constrained in its funding. As a result, there is intense competition for federal funding by public and private not-for-profit facilities. The University would like to work with Alaska Department of Fish and Game but F & G has no money. They may begin to seek operating budget money from _ private corporations and foundations. However, these corporations are more likely to fund capital equipment and are leery about funding operating budgets. Funds from the Exxon Valdez oil spill settlement could be utilized for this purpose. The University is trying to establish a new program to maintain the operation, which has several components that are synergistic with Seldovia's goals and objectives : = Promote eco-tourism - provide naturalist interpretative walks/talks. = Prepare assessments of distribution of clam beds, crab/shrimp fisheries = Assist in aquaculture testing/research. These elements are very compatible with the City's efforts. Efforts to work in conjunction with the University and promote its program at Kasitsna Bay should be undertaken. BST Associates Page 148 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Nine Marine Research Center In addition to the Kasitsna Bay facility, several other neighboring facilities are either underway or about to be developed. In Homer, the Center for Alaskan Coastal Studies is a non-profit organization financed primarily by membership. The facility was intended to do research but could not find financing to support its efforts. It now is a non-profit educational facility taking tourists and school children in off-season to its facility in Peterson Bay for tidepools, trails, and archaeology tours. They have been in business for about ten to twelve years. In Homer, there is also a new facility being established as a Bird Center funded by the US Fish and Wildlife Service. This facility is being developed in conjunction with the USFW Alaska Maritime National Wildlife Refuge which is also located in Homer. There is also a marine education and research facility located in China Poot Bay. In Seward, the Seward Association for the Advancement of Marine Sciences (SAMS) is planning an Alaskan Sealife Center including a large aquarium for tourists and a rehabilitation and research center for injured animals. This facility would cost approximately $45 million. Seward already has a large University center sponsored by University of Alaska at Fairbanks with 21 full time personnel, including those aboard the research vessel Helix. The University, in conjunction with the City of Seward and the State of Alaska Department of Transportation and Public Facilities (ADOT/PF), is attempting to build a better dock to maintain the research vessel in Seward. Cordova is planning the Prince William Sound Science Center. The purpose of this center is to provide research on oil spills. It is being funded with a Murdoch Grant for $500,000 and will be located in a renovated cannery. Valdez is also reportedly interested in developing a marine research center although details are not known. The competition for marine education facilities in the Southcentral Alaskan area is very fierce. Many communities have existing or planned facilities which would compete with any facility planned in Seldovia. Marine Education Center Interest has also been expressed about developing a marine education facility for training skippers in the Northwest. On the West Coast, there is only one maritime-oriented institution of higher learning, namely the California Marine Academy. The school has an enrollment of 500 students and is noted for its excellent record in placing its students. Approximately 70 percent of the students who start the program finish it and 100% of the students have a job within six months of graduation. However, the school is facing financial difficulties because of the decline in US merchant marine jobs and changes in the funding environment. In the first place, state funding has been cut due to the budget deficit in Sacramento. Second, federal funds are now harder to find. Third, the school needs several millions of dollars to repair and convert a BST Associates Page 149 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Nine former freighter and naval survey ship for prospective academy assignment. Tuition for out of state students is approximately $4,000, while boarding costs an additional $7,000 per student. The Academy is soliciting support from other western states to assist in defraying the costs of out of state tuition for their students. Oregon and Hawaii have already pledged their commitment. Washington and Alaska are being lobbied at the present time. The academy is located near the largest population base in the West Coast. In order to be cost effective, it requires maintaining an enrollment of approximately 500 students. Given these factors as well as the school's reputation and placement record even with declining US merchant marine conditions, it would be very difficult for another west coast school to provide a similar service. For these reasons, it is impractical for Seldovia to develop a maritime education center. Learning Center There is also interest in developing a learning center in Seldovia. In fact, an entrepreneur is planning the development of a two story 3,000 square floor building with 10 bedrooms, a kitchen, dining room and conference room. The focus of the facility would be to present an environmental learning center seminar program which would be open year around and provide courses in photography, team-building and outdoor education among other subjects. The facility, which is planned to be open in June 1994, will house 20 people. The entrepreneur will be developing a marketing plan in the next several months. Recommendations Because of competition from other cities for marine research centers, it would be very difficult for Seldovia to develop a marine research and education center. It would also be difficult to develop a maritime academy. However, the existence of the University of Alaska facility at Kasitsna Bay and the development of the learning center by a Seldovia entrepreneur are causes for optimism regarding the maintenance and development of additional educational and research jobs in the area. The City should support these efforts by developing facilities such as the Community Center which would provide additional meeting room space. In addition, the Chamber of Commerce tourism subcommittee should engage the University of Alaska in providing naturalist and interpretative talks and programs that support the local tourist industry. BST Associates Page 150 City of Seldovia CHAPTER TEN THE POTENTIAL FOR DEVELOPING THE SENIOR CITIZEN MARKET Seldovia Economic Development/Tourism Study Chapter Ten THE POTENTIAL FOR DEVELOPING THE SENIOR CITIZEN MARKET Common conceptions about growth trends in Alaska have been challenged in recent years. For example, it has been axiomatic that Alaska has not been a place where people choose to retire. Indeed, given the impression in the Lower Forty-Eight of its harsh winters and lack of facilities and amenities, few have gone against the prevailing wisdom and moved to Alaska for retirement. Indeed, in the past, there was a tendency for older Alaskans to leave the state for warmer climates. Yet, it seems that during the 1980's, the movement of seniors out of Alaska has slowed, resulting in a sharp increase in the number and proportion of the elderly in the Alaskan population. Table 10-1 depicts the change in the senior population in Alaska between 1980 and 1990. Over this time period, the annual average growth rate for Alaskans 65 or older (6.8%) was over twice that for the population at large (3.2%). In fact, during the 1980's the number of senior Alaskans almost doubled, while the State's population increased by a little over one-third. The 1990 proportion of the Alaskan population 65 and older is 4.1%, about 40% greater than the senior share in 1980 (2.9%). The growth in seniors can be traced to the significant growth of middle-aged Alaskans during the 70's and 80's who are now in the process of aging and retiring. Many Alaskan seniors are following national trends by retiring close to their children, many of whom, as reflected in the state's growth, have decided to stay in-state. Finally, there is a monetary incentive for seniors to remain in Alaska. Alaskans 65 and over who have resided in the state for a minimum of one year are now eligible for the $250 per month longevity bonus. This is in addition to the permanent fund dividend that has been averaging about $700 to $800 annually. Indeed, the bonus and dividend payments could act as an incentive for out-of-state seniors to retire in Alaska by augmenting social security and pension payments or off-setting the higher costs of living in the state. While the number of Alaskan seniors is growing, the elderly segment of the population is significantly below that of the United States. Thus, the proportion of elderly in Alaska (i.e. 4.1%) is about one-third the proportion in the United States (12.5%). The elderly, however, constitute a little over 10% of the Seldovia population. It appears that the City is already attractive to seniors. Many factors influence the retirement location decision. The location of the immediate family, especially children, and health are two major considerations. Beyond these, other influences become increasingly important. Quality of life; climate; scenery; access; proximity to health care, shopping, and other amenities; housing availability and costs are also among the major determinants in selection of a retirement location. Seldovia scores well on a number of these factors. BST Associates Page 151 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Ten Opportunities for Development There is much in Seldovia that seniors can find attractive. The City's quality of life: small town atmosphere, general feeling of safety and security, the sense of freedom, and its picturesque setting, are all appreciated by current residents as responses to the household survey indicate. These attributes of the City can serve as strong selling points to the more independent and adventurous retirees who can enjoy and appreciate the Alaskan life style. Seldovia's climate is temperate, lacking extreme temperature highs and lows, and averages about 25 inches of precipitation per year, about one-half the rain fall in Juneau. Housing is currently available and is relatively inexpensive (see Chapter One, Housing). There is one existing senior subsidized housing development, Lakeside Terrace, in the City. An additional inducement is the approximate $4,000 per person per year in longevity bonus and dividend payments that comes with Alaskan residence. Moreover, the City already has a high concentration of seniors, and, with the addition of a significant number of in-migrants, the pool of elderly so created could draw investment into supporting retiree-servicing businesses that could then act to overcome the existing lack of such facilities. A concerted marketing effort, targeted to seniors, using, for example, advertisements placed in the elderly-orientated media, could be effective in bring retirees to Seldovia. Note that one of the advantage of retirees to an area's economy is the economic stability they bring; regardless of the condition of the local or national economy, social security, pension and bonus/Alaska dividend checks continue to flow in. This provides an almost recession-proof base upon which local businesses can build. Constraints to Development The image of Alaska as a cold and forbidding places is one of the major obstacles to attracting retirees to Seldovia. Initially, the City would have to attract the unconventional senior willing to go against the grain. This immediately reduces the size of the potential market the City is attempting to reach. Access is another major stumbling block to developing the senior market. There is no regular scheduled air or sea link directly to Seldovia from Anchorage, necessitating transfers in Homer and decreasing the ease of travel in and out of the City. This tends to increase feelings of isolation that can act to dampen demand. The isolation may be exacerbated by the lack of facilities and amenities, most notably relating to health/medical facilities (the closest hospital is in Homer), shopping, and recreation. Lack of competition and the high cost of transportation also tends to raise the cost of living in Seldovia. Moreover, starting a marketing campaign can be quite costly, especially in the initial stages, although at the same time that costs may be high, marketing and advertising must be supported since to be effective the process must be continuous. Many of the above constraints such as lack of amenities are difficult to ameliorate initially, although over time, if the marketing campaign is successful in bring seniors to the City, investment and facilities to serve them will soon appear. Nothing succeeds like success. BST Associates Page 152 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Ten Table 10-1 Number of Alaska's Elderly Grows by Leaps and Bounds Age % Change Projected % Change Group 1980 1990 1980-1990 2010 1990-2010 65-69 5,206 9,626 84.9% 19,238 99.9% 70-74 3,106 5,922 90.7% 12,629 113.3% 75-19 1,845 3,639 97.2% 9,562 162.8% 80-84 77 1,931 150.5% 6,770 250.6% 85+ 619 1,251 102.1% 5,466 336.9% 65+ 11,547 22,369 93.7% 53,665 139.9% All Ages 401,851 550,043 36.9% 868,300 57.9% Percent 2.9% 4.1% 6.2% Source: US 1990 Census, Alaska Department of Labor BST Associates Page 153 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Ten Table 10-2 Senior Population in 1990 by US, Alaska and Borough/Census Area 65+ Below All Persons 65+ SS Poverty Level Percent 65+ of Total Percent Population Number of 65+ US (1989) 30,984,000 125 3,619,000 11.4 ALASKA 22,369 41 1,606 7.6 Kenai Peninsula Borough 2,015 49 129 6.6 Seldovia 32 10.1 Aleutians East Borough 58 2.4 7 14.6 Aleutians West Census Area 82 0.9 4 5.6 Anchorage, Municipality of 8,258 3.6 382 49 Bethel Census Area 657 4.8 175 26A Bristol Bay Borough 42 3.0 6 17.1 Dillingham Census Area 205 5.1 51 24.9 Fairbanks North Star Borough 2,540 3.3 204 9.0 Haines Borough 182 8.6 13 id Juneau Borough 1,364 5.1 51 3.9 Kenai Peninsula Borough 2,015 49 129 6.6 Ketchikan Gateway Borough 907 6.6 37 43 Kodiak Island Borough 425 a2. 50 11.8 Lake and Peninsula Borough 85 Sei 14 15.4 Matanuska-Susitna Borough 1,866 4.7 125 6.9 Nome Census Area 419 © 5.1 60 155 North Slope Borough 197 3.3 27 14.1 Northwest Arctic Borough 281 4.6 42 16.6 Prince of Wales-Outer Ketchikan CA 216 3.4 24 ris Sitka Borough 492 Sal - - Skagway-Yakutat-Angoon Census Area 235 5.4 17 Va Southeast Fairbanks Census Area 223 3.8 22) 9.8 Valdez-Cordova Census Area 463 4.7 29 6.5 Wade Hampton Census Area 258 4.5 47 18.2 Wrangell-Petersburg Census Area 507 Tee 12 Zs Yukon-Koyukuk Census Area 392 4.6 78 21.4 Source: US 1990 Census, Alaska Department of Labor —_—_ BST Associates Page 154 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Ten Table 10-3 Household Income of Alaskans by Age in 1989 (Percent Distribution) Less Than $5,000- $10,000- $15,000- $25,000- $35,000- $50,000- $75,000 $5,000 $9,999 $14,999 $24,999 $34,999 $49,999 $74,999 $99,999 $100,000 15 to 24 63 93 15.6 273 17.6 13.8 7.0 7 14 25 to 34 33 4.2 6.6 16.7 18.0 213 19.7 67 3.6 35 to 44 27 3.2 3.8 9.1 11.9 20.4 26.0 14.1 8.7 45 to 54 2.9 3.1 3.5 74 8.4 15.2 26.8 175 153 SS to 64 3.9 5.5: 6.2 11.2 12.4 Tied) 20.4 12,7 10.6 65 to 74 4.6 10.6 127 19.1 15.3 15.6 12.0 54 47 15+ 78 18.0 18.4 213 123 10.3 6.9 3.0 2.1 65+ 5.5 12.7 14.4 19.7 14.4 14.1 10.6 47 4.0 All Ages (15+) 3.5 48 6.4 13.3 13.6 18.5 213 10.9 11 Source: US 1990 Census, Alaska Department of Labor EA ne A tS BST Associates Page 155 City of Seldovia CHAPTER ELEVEN SECOND HOMES Seldovia Economic Development/Tourism Study Chapter Eleven SECOND HOMES Recent Sales & Transfers Consistent with the decline in both population and the economy, there has been relatively little real estate activity in the Seldovia area over the past two years. There were 30 transfers of property or sales (warranty deeds) in the Seldovia District during 1991, an area of about 16,640 acres that includes the city and other areas south and east of it. This is three sales more than 1990. Real estate activity in the areas surrounding the other cities on the Kenai Peninsula were far more robust. Property transfers in the Homer, Kenai, and Seward Districts totalled 1,907 transactions during 1991, with the Kenai District (which includes the cities of Kenai and Soldotna) accounting for 1,247 sales or 65% of the total Peninsula housing activity. Construction Trends Housing construction in Seldovia has also slowed to a stand still. In 1991, permits were issued for only two units, up from one in both 1990 and 1989. There were no units built in 1988. For the decade 1981-91, housing construction in Seldovia averaged 3 units per year, with a peak of 10 in 1984. The level of housing construction in Seldovia is far below that in the rest of the Peninsula (see Table 11-2 ) other cities on the Peninsula. Kenai led all other cities with 870 units, followed by Homer with 627 and Soldotna with 585 units. During these 11 years, Kenai led the other Peninsula cities in home building, averaging 79 units per year between 1981 and 1991, 38% above the next most prolific city (Homer). This was especially true of the years 1981 through 1987. But starting in 1988, there was a lull in Kenai's housing construction that lasted until 1991. 1988 was the first year during this period that production in other Peninsula cities outpaced Kenai's. In this case both Soldotna and Seward built more homes than Kenai. In 1991, the number of units built in Kenai again exceeded that of other Peninsula cities. Housing construction in the Borough's cities, robust in the early part of the 1980's, has been steadily falling since 1983, when a peak 555 units were built. While between 1981 and 1991, there was an average of 213 units built per year, the period between 1983 and 1991 saw housing construction decline at an annual average rate of 22.3%. The 74 units construction in the Peninsula's cities in 1991 was the highest total since 1987 and the first time that construction increased over the previous year since 1983. Seldovia Housing Stock As mentioned previously in Chapter 1, the existence of a large pool of vacant housing can be considered an asset for economic development. As of 1990, there were 92 Between 1981 and 1991, 36 housing units | vacant units available in Seldovia. This was were built in the City of Seldovia. During the | nearly 42% of total units. same time, over 2,300 were constructed in BST Associates Page 156 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Eleven Table 11-1 Real Estate Activity Seldovia Recording Office Warranty Deed of Trustee Notice of Month Deed Trust Deed Default TOTAL Percent Jan 1 Z 0 0 3 4.8% Feb 1 1 0 0 2 3.2% Mar 3 4 0 0 7 11.3% Apr 2 1 0 0 5 4.8% May 2 0 0 1 3 4.8% June 3 3 0 0 6 9.7% July 4 1 0 0 5 8.1% Aug 5 5 1 0 11 17.7% Sept 8 3 0 0 6 9.7% Oct Z 2 0 1 5 8.1% Nov 1 2 0 0 3 4.8% Dec 3 5 0 0 8 12.9% Total 30 29 0 Z 62 100.0% Percent 48.4% 46.8% 0.0% 3.2% 100.0% Source: Kenai Peninsula Borough Table 11-2 Housing Units Authorized for Construction Kenai Peninsula 1981-1991 Average Year Homer Kenai Seldovia Seward Soldotna Total Per Year 1981 56 46 1 2 56 161 32 1982 79 104 3 14 82 282 56 1983 109 243 5 36 162 555 111 1984 168 188 10 35 96 497 99 1985 107 154 8 57 118 444 89 1986 53 43 1 19 8 124 25 1987 9 41 4 1 17 72 14 1988 6 6 0 29 25 66 13 1989 ll 3 1 14 6 43 7 1990 13 7 1 2 3 25 5 1991 16 35 2 9 12 74 15 TOTAL 627 870 36 218 585 2343 AVERAGE ST 79 3 20 53 213 PER YEAR Source: "1991 Situation and Prospects", Kenai Peninsula Borough Economic Development District, July, 1992; BST Associates BST Associates Page 157 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Eleven Figure 11-1 Occupied and Vacant Housing Seldovia, 1990 For Sale 2 For Rent 22 Other 10 Occupied 129 Total Units Vacant Units Source: U.S. Census Of these, approximately 58 were designated for seasonal use, 2 were for sale, and 22 for rent. The housing sales and rental prices in Seldovia are now very attractive, especially when compared to Alaskan averages. The median value was estimated to be $75,900 in Seldovia as compared with $94,400 in Alaska. Opportunities The development of the cannery will absorb some of the existing housing stock. However, a substantial amount will still be left available. The City should consider promoting vacant available real estate in Anchorage and Fairbanks as well as outside in the Puget Sound area. BST Associates Page 158 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Eleven Figure 11-2 Occupied and Vacant Housing Seldovia, 1990 For Sale 2% For Rent 24% Other 11% Occupied 58% Total Units Vacant Units Source: U.S. Census Figure 11-3 Housing Values 1990 Less than $50,000 PYYQYYZZLD | canara $50,000 to $99,000 YYW LLL LLL $100,000 to $149,000 (YALL LLL LLL $150,000 to $199,999 $200,000 to $299,999 $300,000 or more 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% MM BNA 9540 Z Alaska Source: US Census Data BST Associates Page 159 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Eleven SS This page purposely left blank. ST i Vv Ok Oooo BST Associates Page 160 City of Seldovia CHAPTER TWELVE WATER TRANSPORTATION Seldovia Economic Development/Tourism Study Chapter Twelve WATER TRANSPORTATION Alaska Marine Highway System Ferry transportation to Seldovia is very important to businesses receiving and/or shipping products as well as to local citizens who wish to trave the road system on the Kenai Peninsula. As a consequence, the Alaska Marine Highway System (AMHS) has served as a vital link for City residents and businesses. Approximately 2,000 to 2,400 passengers and 700 to 800 vehicles disembark Seldovia on an average annual basis. However, the scheduling of the ferry has been unpredictable causing area residents substantial concern. As shown in Figure 12-1, usage of the system is highest from May through September, but the availability of the vessel has been a problem. 1990 was a typical year with 2,371 passengers and 727 vehicles disembarking at Seldovia. In 1991, there was limited service from January through June which severely limited service to 542 passengers and 346 vehicles (See Table 12-2). Moreover, the schedule of the AMHS ferry to Seldovia has not been as attractive as that available for other communities. Often, the ferry called two days in a row with either an overnight stay required or a brief 4 hour stay provided. These items impact resident and non-resident plans as well as business freight requirements. Ferry service is especially critical for businesses which ship freight (e.g. the cannery) or receive freight (e.g., Stampers and other businesses). Since ferry freight costs are approximately $200 per van, if the schedule coordinates well with the SeaLand and TOTE Figure 12-1 Alaska Marine Highway System Seldovia Embarking Passengers Passengers Month — 00 ——1091 GEE Average 87-92 Source: State of Alaska BST Associates Page 161 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Twelve schedule to Anchorage, ferry service is the cheapest way to get produce from Homer to Seldovia. If the schedule does not coordinate, then produce either spoils or must use an alternative, more costly form of transportation. Using barge service increases the freight cost to $1,500 per van. This additional cost must be reflected in higher food prices. It also impacts the cost of operating the cannery. The scheduling of the ferry system can also have a dramatic impact on tourist usage of the system. At the present time, the AMHS is planning a replacement vessel for the Tustemena. Recent meetings have been useful in requesting input from citizens on the features that the new ferry should have. Efforts should be undertaken to achieve a better schedule with AMHS. Alternative Ferry System At the same time, there has been interest in evaluating an alternative ferry system which goes from Homer to Jakolof Bay. Such a ferry might provide more frequent service. The distance from Homer to Jakolof Bay is 12.5 miles as opposed to 18 miles from Homer to Seldovia. The waters are more protected from Homer to Jakolof Bay. In addition, there is a 9 mile road connecting Jakolof Bay to Seldovia. This road is passible most of the year. However, in January and February, a steep stretch of road at Barabara Heightstends to be very icy and may be unusable by freight trucks. Table 12-1 M/V TUSTUMENA EARLY SUMMER SCHEDULE Alaska Marine Highway Schedule DIRECTORY Day /Date LV HOM AR SDV LV SDV AR HOM Fri May 1 9: 00pm 10:30pm Sat May 2 12:30am 2:00am Sun May 3 8: 00am 9:30am 11:00am 12:30pm Mon May 4 8: 00pm 9:30pm 11:30pm 1:00am Wed May 6 8:00am 9:30am 11:30am 1:00pm ***** Trip #1 to Aleutian Islands ***** Fri May 15 12 30pm 2:00pm 4:00pm 5:30pm Sun May 17 1: 45am 3:15am 4:15am 5:45am Mon May 18 10: 00am 11:30am 12:30pm 2:00pm Wed May 20 4:00am 5:30am 6:30am 8:00am ***** Trip #2 to Aleutian Islands ***** Tue May 26 12 15pm 1:45pm 3:00pm 4:30pm Thu May 28 7:00am 8:30am 10:00am 11:30am Fri May 29 9:00pm 10:30pm Sat May 30 12:30am 2:00am Sun May 31 8:00am 9:30am 11:00am 12:30pm Effective May 1 1992 Source: Alaska Marine Highway System BST Associates Page 162 City of Seldovia Seldovia Economic Development/Tourism Study i Chapter Twelve Provision of an alternative ferry system should be considered. However, there are two generalized local concerns. First, provision of another ferry system should not replace service by AMHS. Second, some local citizens are concerned that more frequent ferry service would attract undesirable people. Alternative service should be more thoroughly evaluated for both its positive and negative aspects. A BST Associates Page 163 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Twelve Homer to Seldovia O® Approx. 18 miles = =; R ia ! aN Lo a pean _ peas sr ideatsle Bay Bow fe pprox. 12.5 miles Wey Se XIE : Jakolof Bay to Seldovia \ \ wr by road is approx. 9 miles NYS eh (steep grades exist between \ Barbara Creek and Seldovia) KENAICTD a — a SCALE (MILES) Dy oe A Ais > BST Associates Page 164 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Twelve of Figure 12-3 a” 49 & Py v Oy 4% cf ee wy a“ oF" a” & Jakolof Bay to of S cA Seldovia is approx. os a ” miles of o fs "7 tg Jakolof Bay —— <<< BST Associates Page 165 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Twelve Table 12-2 Alaska Marine Highway System Disembarking Passengers by Month Seldovia 1987-1991 Year 1987 1988 1989 1990 1991 1992 Jan 0 23 9 25 0 7 Feb 0 0 0 0 0 0 March 62 0 0 0 0 44 April 123 57 28 86 0 112 May 151 425 332 244 0 165 June 525 342 296 432 0 279 July 474 475 554 797 81 200 Aug 483 358 631 472 141 276 Sept 199 125 221 © 163 91 102 Oct 130 120 116 38 121 Nov 65 100 a9) 13 31 Dec 117 75 105 16 77 Total 2329 2100 2371 2286 542 1185 Source: Alaska Department of Transportation and Public Facilities, "Alaska Marine Highway System, Annual Traffic Volume Report", various years. Disembarking Vehicles by Month Year 1987 1988 1989 1990 1991 1992 Jan 0 15 10 15 0 Feb 0 0 0 0 0 March 35 0 0 0 0 April 86 32 19 64 0 May 85 112 138 92 0 June 158 117 100 154 18 July 107 101 105 127 45 Aug 86 99 146 126 80 Sept 118 64 69 87 69 Oct 90 81 89 33 58 Nov 60 51 56 13 27 Dec 73 38 68 16 49 Total 898 710 800 727 346 0 Source: Alaska Department of Transportation and Public Facilities, "Alaska Marine Highway System, Annual Traffic Volume Report", various years. BST Associates Page 166 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Twelve Table 12-3 Alaska Marine Highway System Embarking Passengers by Month Seldovia 1987-1991 Year 1987 1988 1989 1990 1991 1992 Jan 27 29 13 18 0 6 Feb 0 0 0 0 0 0 March 60 0 0 0 0 52 April 86 42 9 53 0 81 May 86 251 232 168 0 191 June 307 448 222 340 0 239 July 631 468 534 700 61 212 Aug 440 389 667 613 91 261 Sept 236 161 214 192 122 86 Oct 108 78 83 43 97 Nov 71 129 117 26 34 Dec 114 109 72 1 47 Total 2166 2104 2163 2154 452 1128 Source: Alaska Department of Transportation and Public Facilities, "Alaska Marine Highway System, Annual Traffic Volume Report", various years. Embarking Vehicles by Month Seldovia 1987-1991 Year 1987 1988 1989 1990 1991 1992 Jan 12 21 11 13 0 9 Feb 0 0 0 0 0 7 March 37 0 0 0 0 44 April 58 27 7 33 0 70 May 45 85 84 56 0 25 June 113 98 77 105 0 98 July 133 103 106 122 41 74 Aug 90 112 152 153 54 97 Sept 119 101 85 122 74 51 Oct 78 64 67 38 57 Nov 64 54 86 19 37 Dec 70 39 60 4 30 Total 819 704 735 665 293 475 Source: Alaska Department of Transportation and Public Facilities, "Alaska Marine Highway System, Annual Traffic Volume Report", various years BST Associates Page 167 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Twelve Table 12-4 Alaska Marine Highway Rates Seldovia to Homer Categories Summer Winter Passengers - 12 Years & Over $16 $12 Children 3 through 11 $8 $6 Alternative Means of Conveyance $5 $5 Vehicles up to 10 feet * $15 $14 Vehicles up to 15 feet * $29 $27 Vehicles up to 19 feet * $35 $32 Vehicles up to 21 feet * $44 $41 Vehicles up to 23 feet * . $51 $48 Vehicles up to 25 feet * $60 $58 Vehicles up to 28 feet * $71 $70 Vehicles up to 31 feet * $80 $80 Vehicles up to 36 feet * $95 $95 Vehicles up to 40 feet * $109 $109 Cabin Rates Four Berth - Outside/Complete Facilities $43 $39 Four Berth - Inside/No Facilities $36 $32 Two Berth Cabin - Outside/No Facilities $28 $25 Note: Winter driver goes free Summer schedule from May 1, 1992 to September 30, 1992 Winter schedule from October 1, 1992 through April 30, 1993 Source: Alaska Marine Highway System BST Associates Page 168 City of Seldovia CHAPTER THIRTEEN IMPORTANCE OF LOCAL GOVERNMENT TO THE SELDOVIA ECONOMY Seldovia Economic Development/Tourism Study Chapter Thirteen IMPORTANCE OF LOCAL GOVERNMENT TO THE SELDOVIA ECONOMY The City of Seldovia and the local school system are extremely important to the local economy. First, both provide a multitude of services that would not be provided in their absence. Second, both generate significant employment and spending in Seldovia. Third, both bring to the community substantial grants and loans for capital development projects. These elements are explored in the following section. City of Seldovia Provision of Services Most citizens are unaware of the services that are provided by local governments. Indeed, a well functioning local government goes almost unnoticed. People can sit outside a library, use a park, have a firetruck or police car pass by, look at a fire hydrant or storm drain and still wonder, "What has the City ever done for me?" The City provides a multitude of services for the local citizens of Seldovia as well as those located outside the City limits. These include: BST Associates Page 169 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen Table 13-1 LIST OF SERVICES THE CITY PROVIDES TO THE CITIZENS POLICE AMOOU> TD TOMMUOW> 3. EMS PROVIDES PROTECTION JAILS FELONS PATROLS STREETS INVESTIGATES CRIMES, ACCIDENTS, ETC. SERVES WARRANTS STATE TROOPER BOAT BREATHALIZER EMERGENCY TELEPHONE AND RADIO RE RESPONSIBLE FOR FIRE EQUIPMENT RESPONSIBLE FOR HYDRANTS TRAINS VOLUNTEERS RESPONDS TO FIRES INSIDE AND OUTSIDE OF CITY KEEPS INSURANCE RATES DOWN RESPONDS TO SEARCHES RESPONSIBLE FOR AMBULANCE RESPONDS TO ACCIDENTS AND EMERGENCIES PROVIDES TRAINING 4. HARBOR A. Ze AS rommoOD PROVISION OF STALLS RENTAL OF EQUIPMENT GRID GURRY FLOAT FOCUS FOR FESTIVALS AND EVENTS PROVIDES WATER AND ELECTRICITY FOR BOATS GARBAGE COLLECTION WASTE OIL COLLECTION VEHICLE PARKING SNOW REMOVAL LIGHTING FOR FLOATS RESPONDS TO EMERGENCIES MONITORS MARINE FREQUENCIES 5. PUBLIC WORKS A. WATER (1) RESPONSIBLE FOR RESERVOIRS (2) RESPONSIBLE FOR WATER MAINS (3) TURNS WATER ON AND OFF (4) SUPPLIES CHLORINE TO THE SYSTEM | (5) RUNS FILTRATION SYSTEM (6) CHECKS ON SAFETY OF WATER (7) MONITORS WATER USAGE BST Associates Page 170 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen (8) CARES FOR DAMS AT RESERVOIR AND FISH CREEK (9) MAINTAINS WATER BUILDINGS (10) RESPONSIBLE FOR REQUIRED TESTING (11) NEEDS CERTIFICATION OF OPERATORS B. SEWER (1) MAINTAINS SEWER LINES (2) KEEPS LIFT STATIONS AND PUMPS GOING (3) RESPONSIBLE FOR OPERATION AND EMPTYING SEPTIC TANK (4) NEEDS CERTIFICATION OF OPERATORS C. SNOW REMOVAL (1) PLOWING (2) SANDING (3) ICE BLADING STREET GRADING STORM DRAINAGE VEHICLE MAINTENANCE BUILDING MAINTENANCE CRANE MAINTENANCE AND REPAIR STREET SWEEPING GETTING ICE OUT OF THE CULVERTS MAINTAINS PARKS LOCATES WATER MAINS CITY YARD - IMPOUND AREA LONG-TERM PARKING ANIMAL CONTROL AREA WATER PIPE THAWING VPOZZMA- "TOMMY 6 CITY CLERK WORKS WITH CITY COUNCIL KEEPS BOOKS RUNS ELECTIONS COLLECTS MONEY KEEPS MINUTES TYPES FILES RESPONSIBLE FOR CITY DOCUMENTS DOG AND BUSINESS LICENSES PLACE TO MAKE COPIES NOTARY TRAINS FERRY AGENTS . MAINTAINS CODE OF ORDINANCES PAYS BILLS KEEPS PURCHASE ORDERS SCHEDULES MULTI-PURPOSE ROOM POZEP ASS rOmMUOWD> ds LIBRARY A. HAS BOOKS TO LOAN B. KEEPS PERIODICALS BST Associates Page 171 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen 8. CUSTODIAN A. B. Cc. CLEANS RESTROOMS CLEANS ALL BUILDINGS MAINTAINS SUPPLIES BUILDINGS 9. CITY PROVIDES A. B. Cc. D. SPACE FOR LIBRARY SPACE FOR CLINIC AND MENTAL HEALTH SPACE FOR EMS DOCK (1) FISHING BOATS (2) FERRY (3) FUEL DOCK (4) RAMP FOR TAKING BOATS (5) AREA TO STORE ROCK AND LOAD BARGES (6) CRANE OUT OF THE WATER E. HARBOR NXME<CHMMOVOZZE ASH (1) FISHING BOATS (2) RECREATIONAL BOATS (3) CHARTER BOATS (4) PUBLIC SHOWER AND RESTROOMS FIRE DEPARTMENT (1) PLACE FOR AMBULANCE (2) BUILDING FOR FIRE TRUCK AND FIRE EQUIPMENT (3) TRAINING FOR VOLUNTEERS (4) DIVING? H. FERRY AGENT FERRY AGENT (1) SELLS TICKETS (2) PROVIDES INFORMATION SCHEDULES, ARR AND DEP TIMES LAND, WAREHOUSE AND DOCK FOR DELTA WESTERN LIBRARY SPACE SHOWERS PUBLIC RESTROOMS FERRY STAGING AREA YARD FOR IMPOUNDED VEHICLES FAX MACHINE AND COPY MACHINE FOR PUBLIC LAND FOR SALE AND LEASE 14 (C) (3) MUNICIPALITY TELECONFERENCE SITE JAIL STORAGE FOR FUTURE MUSEUM PROVIDES BUILDING INSPECTION PROVIDES PARKS (OUTSIDEBEACH, RV ETC.) PROVIDES LANDSCAPING FOR PARKS ANNEXES LEASES TIDELANDS PROVIDES MULTI-PURPOSE ROOM AA PROVIDES WATER AND SEWER BB LONG TERM PARKING CC STORAGE FOR CHAMBER OF COMMERCE DD PROVIDES FOR LOCAL HIRE BST Associates Page 172 City of Seldovia Seldovia Economic Development/Tourism Study City of Seldovia Revenues and Expenditures Most people would consider the above services mandatory. However, these services do not come without cost. It is important to know where the money comes from to operate the City and how its resources are expended. As seen in Table 13-2, the City budget for the 1992 fiscal year (ending June 30, 1992) consisted of revenues of $705,835. A little over $178,000 or 25.3% came from the state and federal governments. (The largest source of funds came from charges for services which totalled $291,096 or 41.2% of total revenues. This included charges for water, sewer, dock and ferry office and the small boat harbor. Taxes including real and personal property, sales taxes and motor vehicle taxes generated 28.9% of total revenue. Finally, other miscellaneous sources (i.e., interest income, _ licenses, etc.) generated the remaining 4.6%. It should be emphasized that while the tourist business is extremely important to the local economy, it generates a small but significant amount of revenue from the City (See Table 13-3). The assessed valuation of the tourist businesses is $643,000 generating $4,983 in fiscal year 1992 property taxes. Sales tax revenue generated by tourists industries is estimated at $16,792 or 26% of total sales taxes. The total estimated City income from the tourist industry is 21,755 or 14% of the locally generated sales and real property tax revenue. Expenditures in 1992 were $781,819. Most of the City's budget was utilized to provide administration, public safety and public works. BST Associates Page 173 Chapter Thirteen These three categories represented nearly 75% of City expenditures. The remaining expenditures were for general government, utilities, municipal dock and the boat harbor. City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen Table 13-2 City of Seldovia Statement of Revenues and Expenditures by Source Fiscal Year 1992 Categories Amount Percent Revenues Federal Government $58,045 8.2% State of Alaska $120,262 17.0% Taxes Real Property $95,091 13.5% Personal Property $40,121 5.7% Sales $64,425 9.1% Motor Vehicle $4,423 0.6% Sub-total $204,060 28.9% Charges for Services Dock and Ferry Office $50,315 71% Small Boat Harbor $118,065 16.7% Water fees $67,504 9.6% Sewer fees : $55,212 7.8% Sub-total $291,096 41.2% Other ; Penalty and Interest $3,626 0.5% Interest on investments $18,119 2.6% Licenses, permits and fines $2,833 0.4% Rents $2,184 0.3% Miscellaneous $5,610 0.8% Sub-total $32,372 4.6% TOTAL REVENUES $705,835 Expenditures General Government $6,846 0.9% Administration $281,203 36.0% Public Safety $166,275 21.3% Public Works $138,937 17.8% Utilities $13,376 1.7% Municipal Dock $15,432 2.0% Boat Harbor $75,256 9.6% Other $84,494 10.8% TOTAL EXPENDITURES $781,819 Source: City of Seldovia TE ETIEEnE EES RIE Sana BST Associates Page 174 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen Table 13-3 Municipal Revenue from Tourist-Related Businesses Seldovia Fiscal Year 1992 Property Tax 1992 Percent City Real of 1992 Assessed Mill Property Tax Revenues Property Value Levy Revenue Boardwalk Hotel $337,700 0.00775 $2,617 Seldovia Fishing Adventures $94,300 0.00775 $731 Kachemak Kafe $108,000 0.00775 ° $837 Centurion Restaurant $103,000 0.00775 $798 Total $643,000 $4,983 5.2% Taxable City Sales Retail Sales Tax Tax Sales Tax Sales Rate Revenue Tourism-Related Sales [1] $559,077 0.03 $16,772 26.0% Total Tourism-Related Municipal Revenue $21,755 13.6% [1] Retail sales are for the year 1991 Source: City of Seldovia, BST Associates a A RR BST Associates Page 175 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen City of Seldovia Generation of Payroll The City is also a very important employer in the local economy. Approximately 50% of the City's budget (i.e. $383,163) goes directly to employee salaries and benefits and outside local citizen contract labor. To put this into perspective, the cannery may _ generate between $480,000 and $1,000,000 in payroll depending on market forces. At the low end of the employment range, the City generates approximately 75% of the cannery's payroll and the high end approximately 35% of the cannery's estimated payroll. The City also owns a_ wilderness park, recreational vehicle (RV) and tent facility near Outside Beach. This facility has not been properly marketed to attract recreational visitors.. If properly marketed, it could be used to attract "Snow birds" or other travelers from outside. Snow birds typically like to escape from Arizona (or other such hot locations in the summer), have invested $50,000 to $200,000 in RV equipment and purchase goods and services in the local area. The park should be priced to pay for its maintenance. Table 13-4 EXPENDITURES - SALARIES/BENEFITS/CONTRACT LABOR CITY OF SELDOVIA . FISCAL YEAR 1992 Categories Amount Percent Administration Salaries/benefits/contract labor $95,874 24.8% Public safety Police $93,003 24.1% Fire $38,534 10.0% EMS $1,635 0.4% Sub-total $133,172 34.5% Public Works $101,114 26.2% Utilities Water $1,379 0.4% Sewer $15 0.0% Municipal Dock $5,971 1.5% Boat Harbor $48,638 12.6% TOTAL $386,163 Percent total expenditures 49.4% Source: City of Seldovia Budget, BST Associates BST Associates Page 176 City of Seldovia Vv Seldovia Economic Development/Tourism Study Chapter Thirteen City of Seldovia Seldovia, stimulating the local economy. The ; projects supported by outside funding Summary of Funding Requests obtained by the City for 1992 are shown in . . Table 1 3-5. The City generates approximately $500,000 to $1.3 million per year in capital development funding. In fiscal year 1991, the City reused $1,264,000 to fund Capital Projects as water and sewer improvements and harbor repairs. A good portion of these funds are spent in Table 13-5 SCHEDULE OF STATE FINANCIAL ASSISTANCE CITY OF SELDOVIA Grant Agency Program Component Award Percent Department of Administration: Municipal Grant Program Beautification $150,000 11.9% Jobs bill Water and sewer improvement $200,000 15.8% Dock hoist $30,000 24% Water treatment facility $95,000 7.5% Dock repairs $75,000 5.9% Department of Community and Regional Affairs; Municipal assistance $46,517 3.7% State revenue sharing $41,588 3.3% Rural development assistance $100,000 7.9% Oil spill coordination $28,224 2.2% Tourism $13,000 1.0% Department of Transportation and Public Facilities: Harbor repairs $150,000 11.9% Ice damage repair $40,000 3.2% Department of Environmental Conservation: Sewage treatment $295,000 23.3% GRAND TOTAL $1,264,329 100.0% For the Year Ended June 30 1991 Source: City of Seldovia BST Associates Page 177 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Thirteen School District Susan B English Elementary and High School is also a major contributor to the local economy. In 1990/91, the school operated with a total budget of slightly more than $1 million. Of this total, more than three quarters (i.e. $780,000) was devoted to teacher, principal and other staff (including aides) salaries and fringe benefits. The enrollment at the school peaked at 109 in the 1989/90 fiscal year. However, actual enrollment fell to 90 students in 1991/92 and is projected to fall further to 89 for the 1992/93 fiscal year. With this decline in enrollment, the school's operating budget will be reduced to $919,823, a decline of 3% over the previous year. Efforts to improve the economy will also have a very positive impact on the school. Table 13-6 Susan B English Elementary and High School Actual Expenditures 1990/91 Component $ Spent Percent Teachers/Principal $507,906 49.9% Other Staff $126,518 12.4% Fringe Benefits $146,102 14.3% Sub-total Payroll $780,526 76.6% Other Expenses $238,248 23.4% Total Expenditures $1,018,774 100.0% Source: Kenai Peninsula Borough School District, Annual Budget 1992-3 BST Associates Page 178 City of Seldovia w CHAPTER FOURTEEN OTHER OPPORTUNITIES Seldovia Economic Development/Tourism Study Chapter Fourteen OTHER OPPORTUNITIES The following chapter evaluates the Manufacturing opportunities for light manufacturing, repair and other businesses in Seldovia. Other Opportunities Other opportunities that have been mentioned as _ potential economic development opportunities for Seldovia include light manufacturing, transportation, repair services and recreational operations. The size, seasonality and potential of these business opportunities are further evaluated in the following section. Manufacturing employment on the Kenai Peninsula has increased from 1,314 in 1984 to 2,066 in 1991, an annual average growth rate of 6.7%. Most of the manufacturing employment which is _ centered in Kenai/Soldotna, Seward and Homer, and consists of fish processing, metals manufacture to support the fishing and oil and gas industries, commercial printing and forest products manufacture. Manufacturing employment exists for one of two reasons : = It sells to and supports the local economic base (i.e. fishing) and/or = It utilizes local resources (i.e., fish, logs for lumber production, and chemical manufacture of byproducts of the oil and gas industry, etc.) Table 14-1 Manufacturing Employment Trends in the Kenai Peninsula Borough Kenai/ Year Homer Soldotna Seward Total 1984 241 891 169 1,314 1985 175 1,068 171 1,419 1986 138 1,009 139 1,295 1987 115 1,042 157 1,320 1988 163 ,151 179 1,486 1989 181 1,206 239 1,644 1990 304 961 312 1,861 1991 439 1,310 334 2,066 Source: 1991 Situation and Trends, Kenai Peninsula Borough Economic Development District BST Associates Page 179 City of Seldovia y Seldovia Economic Development/Tourism Study Manufacturing in the Kenai Peninsula and especially in Seldovia will be limited to those activities which utilize area resources or a captive market, such as log house production, lumber manufacture and small boat repair. Other manufacturing ventures which do not utilize area resources and/or serve local markets are unrealistic due to the cost of bringing resources to Seldovia and shipping products to the market(s). Lumber manufacture and log house building are discussed in Chapter Six (Timber and Related Processing Opportunities). Taxable sales of manufacturing firms in the Kenai Borough range from approximately $6 to $7 million per year. Most of the taxable sales of manufacturing products consists of primary metal manufacture which is generally related to either boat building/repair or the oil and gas industry. Manufacturing sales have been fairly consistent on a quarterly basis. In Seldovia, manufacturing, (primarily small boat repair, has accounted for less than $5,000 Chapter Fourteen in taxable sales during each of the past three years. In Comparison, Homer metals manufacture totaled nearly $350,000 in 1991. The opportunity exists to develop more manufacturing in Seldovia, but this will require the development of additional facilities in the City to support the fishing and recreational boats in the area. Seldovia has recently completed a feasibility study of a boat haulout facility. The study indicated that the boat haulout facility could generate additional work in Seldovia, but it would be generally limited to repair efforts by local citizens. The facility was expected to break even. Since the conclusion of the study, several factors have improved the chances of the boat haulout facility: the City received $150,000 from the State, the fish processing plant is re-opening and the City intends to ask for additional funds from the legislature. Efforts should be undertaken to develop the boat haulout facility. Table 14-2 Taxable Sales of Manufacturing Firms Kenai Peninsula Borough and Seldovia 1990 - 1992 Area 1Q 2Q 3Q 4Q Year Total Seldovia 1990 $88 $941 $2,003 $1,574 $4,606 Borough 1990 $1,129,634 $1,910,816 $1,941,115 $1,831,097 $6,812,662 Seldovia % of Borough 0.0% 0.0% 0.1% 0.1% 0.1% Seldovia 1991 $322 $582 $701 $130 $1,735 Borough 1991 $1,297,468 $1,774,987 $1,955,300 $1,406,288 $6,434,043 Seldovia % of Borough 0.0% 0.0% 0.0% 0.0% 0.0% Seldovia 1992 Q1-3 $35 $1,693 $2,323 $0 $4,051 Borough 1992 Q1-3 $1,222,753 $1,666,755 $1,756,371 $10,649 $4,656,528 Seldovia % of Borough 0.0% 0.1% 0.1% 0.0% 0.1% Source: Kenai Peninsula Borough Finance Department, BST Associates BST Associates Page 180 City of Seldovia Seldovia Economic Development/Tourism Study Chapter Fourteen Repair Services Taxable sales in the Borough from repair services (including automobile _ repair, electrical/electronic repair and small machine repair) totalled $14.6 million in the first three quarters of 1992. Auto repair was $7.3 million, welding repair $970,000, electronic/electrical repairs were $853,000 and miscellaneous repairs were $2.3 million. In Seldovia, repairs totalled a reported $998 down from $12,000 in 1990. The reopening of the fish processing plant will provide a boost for the local economy of Seldovia. Among other businesses a repair service that caters to automotive, small appliance/machinery, electrical/electronic repair and boat repair will likely become viable. A general handy-man service could also function quite well. Transportation Services Water transportation services for passengers between Homer and Seldovia are estimated to have generated more than $200,000 (ie. 11,480 passengers aboard foot ferries at $20 per head equals $229,600). Water transportation services are currently the exclusive domain of Homer boat operators. It would be possible for Seldovia boat operators to participate in this trade. RV Parks & Campsites RV Parks and campsites in the Kenai Peninsula generated $869,610 in the first three quarters of 1992 (approximately 5% of all hotel/motel and related hospitality sales). The RV Park owned by the City at Outside Beach is currently extremely underutilized. There are good opportunities to increase the use of this facility. Efforts should be made to advertise the RV park and tent sites in Lower 48 travel guides, with AAA and with AARP. Coin Operated Laundries Coin operated laundries generated more than $750,000 in the Kenai Borough during the first three quarters of 1992. The laundry facilities at Stampers proved to be expensive to operate and thus were closed. However, a new coin operated laundry is scheduled to be started in Seldovia in 1993. It has a good opportunity to serve the local citizenry, tourists on longer stays, fishermen and recreational boaters. Barber and Beauty Services Barber and beauty services in the Kenai Borough generated nearly $2 million in the first three quarters of 1992. This equates to approximately $47 per person. As the economy of Seldovia improves, barber/beauty services could generate gross revenues of up to approximately $1,500 from the local market. BST Associates Page 181 City of Seldovia y Seldovia Economic Development/Tourism Study Chapter Fourteen Tax Preparation and Related Services In the first three quarters of 1992, tax preparers generated $402,000 in the Kenai Borough. Although transportation costs would add somewhat to operating tax preparation or other like business services in Seldovia, it is possible that the right individual(s) could develop such a business. One method to enter this business would be to assist the local accountant or tax preparers located in Homer or Kenai/Soldotna. The existing business will likely increase sales as the Borough economy expands. Computer & Data Processing Services In the first three quarters of 1992, computer/data processing businesses generated $353,000 in the Borough with $133,000 alone generated in Homer. Like tax preparation or other business services, computer and data services could also be undertaken in Seldovia. Again, it would be more expensive to operate the service from Seldovia due to distance from clients but the right individual could develop a business which targeted the right market niche. Miscellaneous Recreational Facilities In the first three quarters of 1992, Borough bowling centers generated $662,000, public golf courses generated $415,000, coin-operated amusement devices generated $810,000, sports/recreation clubs generated $378,000 and miscellaneous recreational services generated $8.6 million. The right individual may be able to provide recreational facilities/services that would tap the local and tourist market. a BST Associates Page 182 City of Seldovia