Mayor Mark Begich remarks
SeattleChamber of Commerce – AlaskaCommittee
Noon; Nov. 14, 2003; Seattle, Washington

            Thanks, Jan Underwood (Alaska Committee chair), for your introduction and for welcoming our Anchorage delegation here today. It’s an honor to join so many friends of Alaska who are members of the Chamber’s oldest and largest committee.

          I’ve been in office a little over four months now and as you probably know, we’re deep into budget issues – contending with a $33 million budget gap that’s about 10 percent of the entire city’s budget.

          Taking my first business trip outside of Alaska in the middle of that might not be the recommendation I’d get from my political advisors. But when our Economic Development Corporation proposed an opportunity to pitch Anchorage’s potential to some of Seattle’s most prominent business leaders, I jumped at the chance.

          Let me first introduce our delegation:

          Larry Crawford is president and CEO of the Anchorage Economic Development Corporation, our city’s business development advocacy group.

Jenny Evans is AEDC communication manager.

          Rob DeRocker is with Development Counselors International, a marketing firm working for AEDC.

          An AEDC board member and executive with our leading telecommunications company is Andy Coon of GCI.

          And from my staff is Heather Rausch, a community development specialist who focuses on economic and community development.

          We’re here for one reason – to build on the mutually beneficial relationship that’s existed between our regions for better than a century.

          Today I’d like to discuss some ways to strengthen our relationship and detail a few specific economic development opportunities my administration is pursuing in our state’s largest city, Alaska’s business headquarters.

          You know better than me the close ties that have existed between Seattle and Alaska since the days we were known as Russian America. In fact, I understand during the turn of the century, the business leaders of this town wanted to ensure that you enjoyed the fruits of the Alaska gold rush.

          So the Seattle Chamber hired a local newspaper reporter and all-around huckster whose innovational techniques would be the envy of any blue chip PR firm today. Through mailings of photos and promotional brochures that were occasionally accurate, the motto he spread all over the world was, quote: “Seattle equals Alaska and Alaska equals Seattle.”

          It paid off because by 1917, more than $39 million worth of Alaska products - salmon, halibut, gold and other minerals - had passed through Seattle, and nearly $10 million worth of Seattle-generated products were exported to Alaska. 

          Of course, that pales in comparison to the economic activity between our regions today. The frequently cited 1994 study by the Seattle and Tacoma Chambers documented that trade with Alaska accounts for more than 90,000 jobs and $3 billion in earnings for this region.

          Those figures are nearly 10 years old, so I’m certain the value of economic activity between Alaska and Puget Sound far exceed that today.

          Our economic ties have been nurtured by a history of political cooperation. During the ‘50s, ‘60s and ‘70s, as Alaska came of age economically, our state’s progress was advanced by Washington political leaders.

          Scoop Jackson was the floor manager for the Alaska Statehood Act and helped push through congressional approval of the Alaska oil pipeline. My father, Nick Begich, worked closely with Scoop Jackson and Warren Magnuson when he served as Alaska’s congressman in the early 1970s.

          I know one of my dad’s proudest moments was helping pass the 1971 Alaska Native Claims Settlement Act. Senator Jackson was the Senate Interior Committee chairman at the time, working closely with my father and Alaska Native organizations on that landmark legislation.

         Today, we need to revitalize that sense of cooperation if we want to grow our relationship and expand opportunities for the citizens of both our communities.

         This morning I was pleased to spend an hour with Mayor Nickels, who pledged his support for a stronger, mutually beneficial relationship between Anchorage and Seattle. We agreed to work toward a formal economic cooperation agreement that we’d like to sign at a future meeting.

         Of course, we both acknowledged that this is a competitive world and our mission is encouraging the entrepreneurial innovation of our business leaders. The role of governments at the local and state level is creating the pro-business environment in which the private sector can excel.

         That’s certainly been at the top of my agenda since I was elected last April. Starting with our transition effort, we’ve got a little different approach in City Hall, reaching out broadly across our community to involve the public.

         In our transition effort, we involved more than 100 Anchorage citizens, dominated by business leaders. It helped us set a new direction based on a simple vision: community, security, and prosperity.

         To achieve this three-part vision, one of the first steps we took was to reorganize city government. Surprisingly to us, the words “economic development” did not appear in the org-chart of city departments we inherited. We have changed that.

         What I call our toolbox of city government – departments that assist developers and help create a business-friendly environment – are now reorganized into a new agency of Economic and Community Development.

         That agency has taken the lead helping create a pro-business environment and clearing the way for development by the private sector.

         Of course, the single issue I have devoted most attention to is the city budget. The $33 million gap I mentioned is the most significant budget challenge the city has faced since the oil price crash of the late 1980s.

         Its causes are three pressures I’ve described as a “perfect storm.” A combination of big state budget cuts, the constraints of our property tax cap, and increased demand for services for a growing city.

         The way we’re tackling this budget problem is what I’m calling the duct-tape approach. Think of applying a long strip of duct-tape to your arm, rubbing it down well and then jerking it off as fast as you can. The pain is sharp and immediate. But there is time to heal in the future.

         I’m confident the steps we’re taking to reduce the budget and deliver core services efficiently will provide us a stable and sustainable budget for the long haul - a strong foundation for Anchorage’s future.

         Of course, the best way to balance our budget is create new economic opportunities. Our budget provides the means to expand Anchorage’s economy with targeted investments in new economic diversification projects.

         One sector that’s vitally important to Alaska’s resource industries and your business with us is transportation.

         At the top of our list is a major expansion of the Port of Anchorage, a city-owned facility. You may be surprised to hear that goods for 90 percent of Alaskans pass through our port, which generates $750 million annually in direct economic activity.

         We’re undertaking a quarter of a billion dollar port expansion to accommodate future growth in several areas.

         First, expanded cargo business. We are eager to expand imports from Puget Sound and other markets. In fact, this summer we welcomed two new TOTE Orca-Class vessels custom-designed for expanded trade between Alaska and the Pacific Northwest.

         At the same time, we are increasing Alaska’s exports, especially to the Pacific Rim. Our state exports about $2.5 billion worth of goods annually, mostly of fisheries and energy products to Asia.

         We also serve as the gateway to the Russian Far East – lending our expertise and selling supplies to oil and gas development on Sakhalin Island, Russia.

         Our port expansion will also accommodate the growth and rapid deployment of military forces. Alaska is home to a new Stryker brigade, a 3,000-soldier unit designed to move at a moment’s notice to any world trouble spot. The Stryker’s equipment will ship out of the Port of Anchorage.

         Finally, we’ve designed the port expansion for more and larger cruise ships, many of which are headquartered in Seattle. Each season, Holland America, Princess and others bring about 750,000 visitors to Alaska. The visitor industry is Alaska’s third leading employer.

         Another transportation hub vital to your businesses is Ted Stevens Anchorage International Airport. We like to boast of Anchorage as the “crossroads to the world” because we’re just nine hours from 95 percent of the industrialized world.

            Anchorage airport is the world’s Number 3 cargo airport, with 25 international cargo carriers making nearly 600 wide-body landings a week. We’re expanding our cargo operations and have ample space to accommodate distribution and light manufacturing facilities.

         As Andy Coon from GCI can attest, Alaska is also on the cutting edge of the telecommunications industry. We are currently served by two surface and three submarine fiber optic systems, backed up by satellite. A fourth fiber cable is under development.

         This means Alaska is as well connected as anyplace. And the advantage we offer is a quality of life that is the envy of the world.

         One of my initiatives is building on Anchorage as an international city. Already, we are one of America’s most culturally diverse cities, with 92 languages spoken in our school district.

         We are working to capitalize on Anchorage’s diversity, our quality of life and our international time zone advantage to make our city an International Financial Center.

         Today, three Anchorage-based firms manage well over $10 billion in assets for companies and individuals across the world. They do it using home-grown expertise trained at our University of Alaska.

           Alaska’s advantage is that you can conduct business during regular hours and touch most of the world’s finance markets during much of their business day.  And instead of fighting congestion and other big-city problems like in so many other financial capitals, you can be home at a reasonable hour to enjoy dinner with your family, an evening golf game under the midnight sun, or a cross-country ski in the winter.

         We are pursing two other opportunities I want to mention today that will greatly improve the quality of life we offer in Anchorage.

         One is a major rehabilitation of our downtown into a flourishing shopping and entertainment district. A cornerstone of that development is a new large convention center capable of handling large conventions and meetings that our current center just can’t accommodate.

          Last year, conventions and events in Anchorage produced $77 million in economic impact across our city. That’s from conventions of 1,500 or less. Within the next couple of months, we plan to issue a request for proposals from the private sector to build a new convention center that will anchor our downtown redevelopment.

         The second opportunity lies at Anchorage’s southern border. It is taking advantage of the natural assets of the community of Girdwood to make it a year-round resort of world-class status that will rival resorts like Whistler just to the north of here.

         Next to the existing ski and hotel development is an area known as Winner Creek-Glacier Valley, considered the best undeveloped ski terrain in North America. Much of it is municipal land.

         Much of it is beginner and intermediate scale, which is attractive to marginal skiing families like mine. Some of it is on a glacier, so there’s potential for year-round skiing. And the longest run would be five miles long.

         Preliminary estimates show the area could attract thousands more skiers per winter, with another 320,000 visitors in the summer. This would generate $74 million a year in gross revenues and create up to new 900 jobs.

        Taking advantage of this once-in-a-lifetime opportunity to put Alaska on the international year-round recreation map represents a $400 million public-private investment.

        There are many other opportunities I’m excited about in Anchorage and Alaska. But let me conclude with one of enormous potential for both our states.

          Alaska has long been this nation’s energy storehouse, supplying up a fifth of our entire country’s daily oil production at the height of North Slope oil development. It’s been estimated that Washington state received $1.7 billion worth of economic activity from Alaska oil development between 1980 and 1994.

        These mutual benefits were possible because of the close political alliances between our regions I mentioned earlier.

        Today, our regions are poised for similar mutual benefits from additional energy development in Alaska. Of course, I’m speaking about environmentally responsible development of oil beneath the Arctic National Wildlife Refuge and development of Alaska natural gas.

        Development of these resources would be good for America – producing thousands of jobs, lessening our dependence on imported oil, reducing prices at the pump, improving our nation’s trade deficit, providing environmentally friendly natural gas for our nation’s electrical supply, and a host of other reasons.

        A study by an ANWR advocacy group estimates 12,000 new jobs would be created here in Washington state by oil and gas development in the refuge.

        An Alaska gas pipeline would create an estimated 400,000 jobs nationwide, with many of those right here in the Pacific Northwest.

        Unfortunately, both issues are at a stalemate in Congress, which must take action to advance either development.

         I commend the Seattle Chamber for your early support of ANWR development. And I appeal to you to exercise your influence with your own political leadership to urge support of these important energy projects that would do so much for both our regions and entire country.

         A long history of cooperation between Alaska and the Pacific Northwest has helped produce prosperity for generations of our residents.

         I believe the potential in new opportunities between us is limitless if we continue to work together to strengthen our common bonds.

          Thank you for having me here today.

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