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HomeMy WebLinkAbout1989-03-18 Ecomomic Development Commission SummaryMEETING OF FISH PROCESSORS, COUNCIL, ECONOMIC DEVELOPMENT COMM., HARBOR COMM., LOCAL LEGISLATORS, REPRESENTATIVE FROM THE GOVERNOR'S OFFICE, CHAMBER OF COMMERCE AND CITY ADMINISTRATION MARCH 18, 1989 - 9:00 AM KENAI CITY HALL CHAIRMAN VINCE O'REILLY PRESIDING INTRODUCTI ON Chairman O'Reilly introduced the participants. AGENDA APPROVAL Approved as submitted. COMMENTS BY MAYOR Mayor Williams. 10 years ago there was a study relative to the harbor. It showed a need, but that it was too costly. But there are a great number of needs that the City should be involved in 'relative t° the fisheries. Therefore, we are developing a seafood industrial park. The City has shelved the cold storage warehouse completely. There is much opposition. A boat repair facility, boat storage, water & sewer to- other facilities are needed. Water & sewer has been engineered. We own the utility corridor to the dock facility. COMMENTS BY CHAIRMAN Chairman O'Reilly. There was a meeting March 9' with fisheries people and processors. This meeting is to meet with legislators and the Governor's office people. This is for all to present a unified proposal to the State. I. BRIEF OVERVIEW OF JUNEAU SITUATION - LEGISLATORS Rep. C.E. Swackhammer. The good news is the oil price is up.. But that could be bad for the State. We have made agreements with Administration for a $150 Million to $200 Million cut. It is the wisest thing we can do considering the long term reduction from Prudhoe Bay. $60 Million will be for Federal match for roads, water & sewer projects. There is consideration of using Railbelt Energy funds for other projects. There may be a problem with using them for other than energy related projects. We are trying to wean ourselves away from an oil-based economy. II. DESCRIPTION OF INDUSTRIAL PARK Mayor Williams. We have purchased 31 acres of land adjacent to City lands. The reason is all the rest is wetlands and cannot be used. This is our last wetlands permit. It will be to increase the staging area. If we do not acquire other lands we will not be able to develop any further. It will go from the present location to the highway. It will cost $450,000 to run water & sewer down there. The roads will have to be built, right-of-way, a cost of $300,000. It will have to.be surveyed. It will be $1 Million total. During the concept when we talked about a cold storage warehouse, we anticipated $2 Million. The City pledged $950,000 of its own money and applied for an EDA grant of $950,000. I asked Governor Cowper for an additional $950,000. He asked me, what would happen if the cold FISHERIES DEVELOPMENT WORK SESSION MARCH 18, 1989 PAGE 2 storage warehouse does not materialize. I said we would continue with the seafood industrial park, the cold storage warehouse was just one part of it. We have removed ourselves from the cold storage warehouse and are continuing with the seafood industrial park. Chairman O'Reilly. What is the total cost? Mayor Williams. About $1-1/2 Million - $1 Million from the State, $1/2 Million from the City (for roads, water & sewer, site work, etc.) III. COMMENT BY INDUSTRY AND PUBLIC Chairman O'Reilly noted there were 6 processors in attendance. a. Craig Freas, representing 2 processors - Ward Cove (Columbia Ward) and Kenai Salmon Packers. They received the letters last week. They could not come, they asked me to represent them. Both organizations are strongly opposed to development that would subsidize any industry that currently exists in this area, specifically processing industries. Marine electricity, engine repair would be acceptable. Capital costs should be recovered by lease rates that reflect cost. The government should not be subsidizing industry. Water & sewer, raw land, roads - these businesses have had to spend their own capital to develop these, they would object to government developing these with little or no cost. Chairman O'Reilly. Regarding notification'of this meeting. There was a glitch in getting the mail out, so registered letters were sent out. b. Jim Butler. I am concerned with fishing rather than processing. c. Marvin Dragseth, Royal Pacific Fisheries. I am for this as long as it does not compete with private enterprise. We have 2 good stores in the area now. We have had the biggest years in history, 1987 was the.largest escapement, 1988 was the 2nd largest. We have had the coldest winter in a long time, it will not be as good a year. We are in for some hard times. Water & sewer in the industrial park, if the cost is not too great - I am for it, but not if it is too costly. The processors are going broke. The fishing industry is a 7 week proposition, there will never be a bottom fish industry here. Just because you can get free money from the government does not mean we are not going to pay for it. It does no good to put in businesses and have ones that are here go broke. Chairman O'Reilly. Do you have trouble getting land for expansion? Mr. Dragseth - no. Chairman O'Reilly. Do you pay for your own construction and improvements? Mr. Dragseth - yes. Chairman O'Reilly. Will the seafood industrial park meet the needs for these people that have not been met? Mr. Dragseth - no. The dock facility could use more parking. But as for service and commercial, we have 2 good stores now with supplies, etc. for commercial and sport fishing. FISHERIES DEVELOPMENT WORK SESSION MARCH 18, 1989 PAGE 3 d. Gary Ervin, Seafoods from Alaska. We have been in support of the seafood industrial park since it first came up. Our goal in supporting is for support of industry and development of secondary processing industry. Fishing is now for 7 weeks. Most products go out for secondary processing, we are going into secondary processing. To attract others into secondary processing, a seafood industrial park is necessary. Not just for the Cook Inlet region, but for other areas. The goal of the seafood industrial park should be for secondary processing. There is a Board of Fisheries meeting in Anchorage this date. We should be very involved with regulation of the fisheries. e. Scott Earsley, Inlet Salmon. We support the seafood industrial park, but we don't want subsidies for the new processors. There may be too much capacity in the next few years. I am on the Kasilof River Advisory Bd., it is a concern with the residents of the river and government agencies regarding discharge into the river. Processing is polluting the river by grinding and discharging waste. If we had to quit discharging, Seward Fisheries could not handle the amount discharged. I don't know what we would do with it. We should be looking into this. f. Mike McCune, Dragnet Fisheries. We would like to see the City help with processors, but there should be an outline. We need water & sewer line on Bridge Access Rd. and down to the inlet. Regarding property acquisition, there is no place to fuel up now. We would like to develop a tank farm. We could operate, the City could collect the fees. It would be beneficial to be able to get fuel at all times. It is major expense for our operators to have fuel availability. We would not like to see any fish processors on the seafood industrial park. . Mayor Williams. The City is fueling vessels at the new dock facility. There is a lot of concern by EPA regarding this. It is a Coast Guard approved marine fueling system. Council has authorized purchase of another unit and will expand service. These are areas the City can handle, we have the expertise. There was a tank farm at one time there. It is not subsidized. We netted $67,000 last year. It will be done the same as the airport, it operates within its own pool. Oil rendering plants and baby food plants are proposed. g. Marvin Dragseth. I was at a meeting of the canned salmon industry. There was a discussion regarding interception of fish. 20 Million fish in one instance, 10 Million in another, and 6-8 Million in another. They are not getting 20% of' the fish. If it is not stopped there won't be any fish. Southeast has not had any fish in 2 years. Cook Inlet is using the hatchery fish. It is all going to Japan. Regarding the fuel facility. They are not serving many because of the design of the facility. They come in 200-300 at a time and cannot get service. FISHERIES DEVELOPMENT WORK SESSION MARCH 18, 1989 PAGE 4 It is estimated 2 Million fish from Kodiak are intercepted but high seas interception is important also. h. Joe Nord, Allied Processing. We support the seafood industrial park but ask that it be limited so processors not be in the park or any businesses that will be competitive with local businesses. There is an oversupply of processors in the area. There has been a lot of frozen processing that has been put in recently. This storage thing will not go away. It would only be beneficial about 6 weeks a year. Fuel for boats, boat lift, more parking space, utilities (water line would lower insurance) would all be good. If you lease, make it reflect the cost. Make everything competitive. i. Un-named Processor. There would be a $7,000 to $9,000 fire insurance savings on our building with a water line.. Our building is steel, a wood one would be higher. j. Jim Bishop. I am a 12 year fisherman in the area. The river is finite space. I hope we keep this in mind. There is not enough room for all activity. Considering development, we are bringing more boats in. There is no access to marine safety, the Coast Guard does not have funds for marine safety program. I hope you consider that in your proposal. Councilwoman Monfor. I take exception to Mr. Dragseth's statement regarding stores, we are set-netters and cannot get our supplies. The stores here are for drift fishermen. A seafood industrial park with gear and electric supplies for all fishermen, there is a need for a store. k. Joe Skrha, Attorney. I have been in Kenai 5 years. The need for a secondary processing is important. If this can assist in that, it is good. Regarding the wetland issue, there is about 4 acres involved? Mayor Williams. The City will fill 3-1/2 acres under already planned work. There is no more land and we cannot find any more. Mr. Skrha. I was not aware of any limitation. Who is to say it is not critical? Fish & Game used to say it is not important, now they say it is critical for habitat. The lower part (of the river) is very important. IV. COMMENTS BY COMMISSIONERS a. Barry Eldridge, Chairman, Harbor Commission. There is a need for the City to stay involved in what happens in the river. We have 400-600 boats in the fisheries, as well as recreation fishermen. We need' to provide support to keep the money in Kenai. The Coughenower report shows where 'the dollars go. A lot go other places because we do not provide support services. We are running out of land. Service industries would rather be close to the river. The reason for the study was to identify ways to show the impact of fisheries on the City by providing additional support. There is an opportunity for secondary processing that is not being addressed at this time. Now the FISHERIES DEVELOPMENT WORK SESSION MARCH 18, 1989 PAGE 5 processors get rid of it. There is a need for development. There is still a need for a fuel facility. b. Stan Steadman, Borough Economic Development District. We have an opportunity and responsibility to review the proposals given to the Borough. Funding from the State would be tied to economic development and federal dollars may be available, per Rep. Swackhammer. This was primarily geared to secondary processing. The State responded to the cold storage grant application in a positive way, but the Feds did not. Bernie Richert (Alaska EDA) thought if there was an interest in pursuing the industrial park, they would be responsive. There are other applications in the State requesting funds. If the City wants to go forward with this, they may want to go forward to the State or for EDA funds with a match. There were comments in the community regarding the original application and extension of the fishing was picked up on. If you decide to go forward with this in a different format, the Coughenower report gives information that would validate the request for the facility. The grant should create or retain new jobs. b. Leon Quesnel, Harbor Commission. No one has spoken regarding the environmental problems at the lower river mouth. Fish processors have to get rid of effluent and they dump it in the river. Eventually it will have to be handled in a different way. In the meantime I urge processors to ask fishermen to keep the river as clean as possible. If you pollute the river to the point fish won't come up the river, the fish will not come back. International law says no plastics will be dumped into the water but have to be brought back to land. The sand bars in the river are growing. The Crops. of Engineers have said it is not feasible to dredge. V. COMMENTS Council: a. Mayor Williams. Regarding the application for grant money. If the City chooses to reapply, it will be for redevelopment of the seafood industrial park, not the cold storage facility. EDA has a rule that we need matching money. They do not care where it comes from. If we can use State funds, it is better. It can be used to match EDA money. b. Councilwoman Monfor. We gave processors a chance to lease from Seafoods from Alaska. No one came forward. Yet they are screaming at us for wanting to make something available. I am concerned with those that are not here all year long. We need to be planning for the future. There are some years with fish and some not. We should look at the long term by using EDA funds. We will not be raising taxes. It will be like the airport and pay its own way. Commercial fishing is #1 industry in the City, #2 is tourism. We cannot go any place for supplies. Canneries used to supply fishermen, they do not now. A seafood industrial park will be there 365 days per year. Where else FISHERIES DEVELOPMENT WORK SESSION MARCH 18, 1989 PAGE 6 do you put a seafood industrial park but at the river? Processors have not cooperated with the City when we needed help with summer hires. Our biggest problems are not the industrial park. If we do not have State and Fed cooperation on interception problems, there will not be fish; and dumping of garbage in the river will kill all the fish. It should be solved by all working together - fishermen, processors, buyers, etc. c. Councilwoman Swarner. Thanks to all for coming. I am in support of economic development on the river. d. Councilman Measles. I am in support of the seafood industrial park. I appreciate the attendance this date. The only way Council can get a good decision is to hear all sides. e. Councilman McComsey. I support the seafood industrial park and thank the people for coming out. f. Councilwoman O'Reilly. I support the concept. Sometimes we have a problem with communication. I would encourage the processors to keep closer contact with the City and EDD. Thanks to all the people who came and especially Ernie Piper of the Governor's office and Rep. Swackhammer. Public: a. John Wise, Kenai. This project should be 'laid out clearly. There are processors inside and outside the City because of the tax difference. The City does not stand alone, it is part of the Peninsula. What is good for one should be good for all. We should look at what is good for the whole area. We should build an economic base. We have 2 major assets here, the river and the airport. Both are important for the City and the Borough. If not properly developed, there would be problems. I have asked the cost of bringing water & sewer down Bridge Access Rd. It-would cost $1-1/2 Million. The money in the Governor's budget would not cover this. If you put water & sewer down there, you would open much land for development. HEA would put power down there. The City has to put utilities down there. It will not be in conflict with the processors outside of the City. You don't have to build the seafood industrial park, private industry will do it. It will benefit not only the City but the entire area. Stay with short do-able project of putting water & sewer down Bridge Access Rd. It could be done this summer. b. Ernie Piper, Governor's Office. I am here to listen. We are not here to force it down anybody's throat. 1) We do not want to 'compete with private industry, and 2) We want to be sure the community wants it. Chairman O'Reilly. There' is a want for development and they are hoping it will be done. VI. REMARKS BY LEGISLATORS a. Rep. Swackhammer. It is my hope that people remember that money is short and will be short in FISHERIES DEVELOPMENT WORK SESSION MARCH 18, 1989 PAGE 7 the future. It will be just economic development projects and long term effect. I will share this with Rep. Navarre and Sen. Fischer. This project is in the Governor's budget. Chairman O'Reilly. There is concurrence by all the commissions, 6-0 vote by the Council for it, and testimony by the public - the main thrust is positive. Mayor Williams. Better communications by the public and the processors is a valid request. We have vacancies on the Economic Development Comm. I would like to have a processor representative on EDC. ADJOURNMENT: Meeting adjourned at 10:40 AM. /Ja~otsa~ City Clerk