Dean Barber

No Place for the Faint of Heart

In Places on May 26, 2013 at 8:53 am

As a site selection consultant, I like to think that I have a practiced if not discerning eye.

I am not RoboCop. I will not pick up everything about my surroundings, but I generally get a good idea about a place after I have been there for a few days.

But I find Alaska somewhat confounding. It pushes and pulls me in opposite directions at the same time. It’s an incredibly interesting place, and I am attracted to it for a variety of reasons. But it’s a tough nut to crack.

Now there are some obvious things that stick out in my mind. This is an economy built largely around extraction – pulling oil and gas and minerals out of the ground, pulling fish out of the sea, pulling tourist dollars out of purses and wallet.

It’s an isolated place, and when Alaskans proclaim that they inhabit the “last frontier,” well, they are not kidding.  A frontier grit is alive and well here where 82 percent of the communities are accessible only by air.

The Alaskan Railroad Corporation, owned by the state, operates a rail system that is totally self-contained within state borders. No track connects with a Canadian railroad, and therefore there is no rail linkage between Alaska and the lower 48.

What’s more there is only one road, you read that right, just one road constructed during World War II, linking what would become our 49th state to its brethren states below.

It took me awhile to figure this out, but I soon concluded that Alaska really is an island because of this lack of land-based connectivity. And that factors strongly in it being a high-cost place to live and do business. Virtually everything – foodstuffs, cars and consumer goods — is imported, 80 percent of it through the port of Anchorage.

Wages are higher but so too is the cost of housing. Even a dumpy one-bedroom apartment in Anchorage will go for $900 or more. Houses will typically sale for more than $300,000.

If there is anything low here in terms of costs, it is taxes. Alaska has no sales tax, no inventory tax, no gross receipts tax and no personal income tax. Anchorage has no sales tax, which I noticed when I bought my obligatory T-shirt at the Glacier BrewHouse after stuffing myself with grilled King Salmon and drinking the local suds on my first night on the ground.

It was Tuesday night, May 14, and I immediately knew that I liked this place.

Four Days Later (A Journal Entry)

It is supposed to be springtime here in Alaska, and we are supposed to be going to a farmer’s market this morning. This is our last day here, our “fun day” to do touristy stuff. But from my window on the 16th floor of Hotel Captain Cook, I see snow on the city streets below.

I didn’t bring a warm coat, didn’t think I needed one. It’s Saturday morning, May 18, and even the hardiest Alaskans are displeased with the unseasonably cold weather.  I am reminded by what Bill Popp, president and CEO of the Anchorage Economic Development Corporation (AEDC), said at a dinner the other night, half in jest but half not.

“This place is not for the faint of heart. At least once a year, Mother Nature will try to kill you.”

It could be black ice on a highway or thin ice on a river. Or it could be a mother moose or mother bear with young nearby, and you just so happen to be in the wrong place at the wrong time. Let’s just say you got to be aware of your surroundings here and act accordingly.

I got a better idea of Alaska living and the sheer scope of things the day before while touring the Matanuska-Susitna Valley (known locally as the Mat-Su or The Valley), an area spanning 25,000 square miles (about the size of West Virginia).

The Valley starts only about 35 miles north of Anchorage. If there is going to be any significant manufacturing in Alaska, it will likely take place here because Anchorage has essentially run out of viable sites.

Port MacKenzie, a deep water port designed for export of natural resource commodities, which will soon get rail, and a 160-acre industrial park should prove advantageous for future development. A proposed bridge across the inlet linking the Valley to Anchorage, new natural gas pipeline, and a new hydro-electric dam are all being discussed or in the planning stages, representing billions of dollars of infrastructure investment.

The dam and the pipeline projects have greater local support, the bridge less so. Whatever projects are built, big changes are coming to the Mat-Su Valley. This should be the focal point for future growth.

If I Were a Young Man

As a young man, I may have thrived here. I could have gone traipsing out in the woods in September with rifle in hand to get my moose. I could have been mushing across the countryside with a team of dogs in January, or racing snowmobiles with friends at 80 mph across frozen flats in February.

I am sure that I would have dip-net fished for late-run sockeye salmon on the Kenai River in July. I would have ventured deep into Denali’s trail-less wilderness in August, all the while wearing “bear bells” on my backpack and person so as to not walk up on and surprise any grizzly bears lurking nearby.

(Those experienced in the Alaskan backcountry recognize the difference between black bear and grizzly bear scat. Black bear droppings are smaller and often contain berries and leaves, whereas grizzly droppings will often contain small bells.)

Yes, if I were a young man in Alaska, I might have tried my hand at “living off the grid,” at least for a while, subsisting on what I harvested from nature’s abound all the while disdaining the creature comforts of civilization. Heck, I might have even knocked out a great Alaskan novel, ala Jack London, or panned for gold.

But as that old Texas gambling song goes, “the river ain’t whiskey, and I ain’t no duck, so I’ll play Jack O’Diamonds and rely on my luck.” The fact is that I’m an old man now, a mere visitor to this strange land.

No, I don’t believe I could hack it here, not now.  Would not be a good bet at this point in my life. If I tried my luck at this late stage, they would probably find me in a snow drift come spring, curled up in a fetal position.

This is no country for old men (unless you came here young).

Poor Ron

I actually felt sorry for him. Ron Ruberg was one of three site selection consultants invited on this Alaska familiarization tour by the AEDC.

“I’ve been to Maine four times and four times I was promised that I would see a moose,” said Ruberg, a partner with Location Advisory Services. “I have yet to see a moose.”

There were three of us — Ron, and Dan Levine, also of New Jersey with MetroCompare – and then me, the shivering Texan who was constantly being reminded that Alaska dwarfed the Lone Star State. My retort was lame, but it was all that I could think of. “Well, we’ll just see about that if you ever melt.”

But this moose thing was really getting under Ron’s skin. He even started to question if moose actually existed in the wild at all as we traversed some pretty rugged ground with no moose in sight.  Arriving at the airport to catch my departing flight home after five days in Alaska, I took pictures of two moose mulling about in the FedEx parking lot. 

I emailed Ron pictures to prove to him that yes, moose, really do exist, if not in the wild, at least at airport parking lots. I bet he yelled at the computer screen.

Live, Work and Play

Anchorage is not the first city where I’ve heard this phrase. Until now, I considered it a worn out cliché. But here in Anchorage, it has real meaning. Because of the harsh realities of Alaska, you need a balance to life or you just won’t last. You have to purposely pursue life here or you are going to fold your tent and go home, back to the lower 48.

So I was constantly hearing from my hosts that there were always plenty of things to do here in Anchorage, even in the dead of winter, much of it centered outdoors. I think this live, work and play is a mantra for survival.

It was striking to all three of us consultants that the real evangelists for Alaska were mostly transplants – men and women who chose to come and build lives here. They were all pioneers of sorts, all very much entrepreneurial, betting on a future on the frontier.

And that has to be a strength for Alaska, this unrelenting entrepreneurial drive to make a business and a life work. It supersedes all, including costs. Businesses bank on this sheer determination. It’s the reason why they exist. Heck, it’s the reason why Alaska exists.

Work will get you farther. “People don’t make it here on their mouth, but what they do. If you work hard, you are recognized for it,” one businessman told me.

There are no country clubs in Alaska, and I doubt if there ever will be.

The Life of a Box

The airport intrigues me. I sense there is something very big here, waiting to happen.

Well, it’s already big. The airport in Anchorage is the fourth busiest air cargo hub in the world, serving 49 cargo destinations and accepting on average of 500 widebody cargo aircraft landings per week. It operates 24 hours a day and never closes for snow.

And Anchorage is one of only two places in the United States that allows for foreign-based shippers to unload cargo from one plane and put it on another plane. That transloading process might provide for opportunities in sorting and assembly at nearby facilities, but so far that has not happened.

It is interesting to note that airport authorities to a large degree do not know what is in the boxes or the process of how they ultimately got to Anchorage. Once they figure out the life of a box, well, maybe they can plan accordingly and create economic development opportunities.

The airport exemplifies Alaska. You know the opportunities are here and that they can be big. It’s just putting the pieces together and making it work.

At the AEDC, the focus may shift from recruitment to BR&E – business retention and expansion. I think that is the smarter strategy in the long run. Not only are more jobs created by existing industry, but businesses seem committed to this place. They are here for a reason and they are going to tough it out.

There is a code here. You never pass by someone who is in need of help. That can have life or death consequences.  A helping hand, a solutions provider, is always welcomed, which is what BR&E is ultimately about. It works just about everywhere, but it should especially thrive here on the last frontier.

A special thanks to my guide Will Kyzer with the AEDC, who never got me killed, and Don Dyer, with the Matanuska-Susitna Borough, who enlightened me on sustainable living, Alaskan style.

One last thing, there is no law school in Alaska. I think other states could learn from that.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas —http://www.barberadvisors.com He can be reached at 972-767-9518 or at dbarber@barberadvisors.com

If you work for a company seeking site selection consulting or an economic development organization in need of counsel, ask for our separate brochures (pdfs) outlining how we can help. All requests for information will be considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dean Barber and Barberbiz with specific direction to the original content.

 

 

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  1. That’s a great story thank you, plenty in there for anyone to connect with. I was interested initially as I sold a horse to the USA this year and his journey took him through Anchorage. The journey was Auckland (New Zealand) to Christchurch (New Zealand)overnight. Then Sydney overnight Shanghai (fuel stop); Anchorage I think overnight, then New York.

    Your comments about cargo via air were interesting and obviously Anchorage has established itself as a cargo hub of some significance.

    I also agree with and found your comments of preferring strategy of business retention over business recruitment – we hear a great deal about business recruitment however retaining existing businesses particularly ones which have export and employment potential is an easier result than recruiting new businesses.

  2. My wife and I lived and worked 23 years in Alaska. Now we’re expatriates back in Kansas. You are correct that the place can kill you in a hundred ways if you are not informed, aware and prepared – or even – just not lucky.

    It can also capture your heart forever, as it has done ours.

    Some of the best business people are local entrepreneurs, who have found ways to make money in somewhat unusual (but legal) ways. Niche value – added products, fishing, guiding, outfitting, flying, construction, shipping and transportation in many forms, logging, personal and business services, telecommunications, mining, etc. as well as wonderful art and music.

    So support for those existing entrepreneurs seems all – important.

    Alaska also serves (or did) as an international transportation/communications hub between the United States and Asia, Siberia, Russia, and Northern Canada – and to a somewhat lesser extent to the countries in Northern Europe.

    It is interesting to think that Anchorage/Alaska might serve as a production source for very high value finished intellectual/technical products to those international markets, and as a convenient (relatively speaking) hub for synergistic communications with all those current and prospective markets.

    (That is, If the potential producers can locate Up North and stand the existential challenges. Mid -winter trips to Kona, Hawaii or Cabo San Lucas, Mexico help a lot)

    Bob Cole

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