Mayor  Mark Begich Remarks
Resource Development Council
7 a.m.; Nov. 6, 2003; Petroleum Club

Thanks, Chuck Johnson, for that introduction, and for your service to this organization and our community. Thanks to RDC for your efforts to improve our community through responsible economic development.

I appreciate the opportunity to talk with you this morning. My staff was giving me a hard time about the early hour of this meeting. They don’t think I’m a morning person. Little do they know that anyone with a 14-month-old is a morning person, a middle of the night person or whatever it takes.

Today, I want to report on the direction my administration is trying to lead our city. I’ll outline what we’ve been up to for the past four months and discuss what I believe are some incredibly promising opportunities on the horizon.

I came into the mayor’s office with a little different approach. It can probably be described by a few simple phrases: Involve the public. Lay it on the line. And the glass is always half full – not half empty. I am truly an optimist.

Starting even before we moved into City Hall, we’ve tried to reach out broadly across our community to involve the public. We asked more than 100 Anchorage citizens to join our transition effort to dig through every city department.

I know many participants would prefer to forget those endless meetings in the middle of a sunny June. But I do appreciate the service of your executive director, Tadd Owens.

Our goal was two-fold: provide me a report card on the pressing issues we need to tackle. And fully involve the public in the process. The transition 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. Instead of the five groups of departments we inherited, we shrunk them down to three.

An Assembly review of our reorganization reported a savings of near half a million dollars annually from the elimination of several layers of bureaucracy.

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. It’s headed by a very energetic Mary Jane Michael.

One of Mary Jane’s first actions after I hired her was finding a small stash of federal money to demolish a dilapidated building in Spenard. It had been a public safety hazard and blight on the neighborhood for 40 years.

I know a few of you in this room have a little experience with heavy equipment. Helping bring down that building was my first time in the driver’s seat of a backhoe - and probably my last.

The publicity around that single act has motivated many private landowners to step forward and clean up other eyesores around town. We have a long list of other properties ready for similar treatment.

We also are working to break the gridlock on many other issues over the past 130 days.

·         A new sign ordinance after more than a year of debate.

·         A comprehensive site condo ordinance after more than two years of discussion.

·         Responded to safety concerns on Anchorage’s trails with the volunteer Trail Watch program, which we put together in less than 30 days.

·         After four years of controversy, we’ve got the Simonian Little League fields under construction and involved affected neighbors in the development.

·         We opened five new dog parks.

·         Closed nearly 700 delinquent accounts after posting the names of 21,000 people who owe the city money on the Internet.

·         Re-energized the city Veterans Commission and advanced the possibility of an Alaska Veterans’ Home.

·         Restructured the library to clear the way for future expansion.

Just to name a few

Of course, the single issue I have devoted most attention to is the city budget.

A few days after settling in, our mild-mannered OMB director, Paul Wiltse, came with some news. It seems there’s a budget shortfall of a little over 5 million dollars for the current budget year, and less than six months to make it up, he reported. And that was the good news.

The bad news was a 33-million dollar budget gap for Fiscal ’04 - about 10 percent of the entire municipal budget. It is the worse budget challenge the city has faced since the oil price crash of the late 1980s.

My reaction was let’s lay it on the line with the public. Tell Anchorage residents the details regardless of how painful they may be and ask them to help us come up with the solution.

The way we’re tackling this huge 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.

This duct-tape way we’re dealing with next year’s budget requires a three-prong approach.

First, provide core services while reducing costs. Second, we’re asking those who benefit from services to more equitably cover their costs. This raises about $9 million. Third, we’re reducing non-core services or eliminating those we can no longer afford.

These actions provide us a stable budget, a sustainable budget – a strong foundation for the future.

Any budget is about people and unfortunately, this one eliminates 149 funded positions, about half of which are currently occupied. That means that about 75 workers will likely lose their jobs.

Even though we must contend with this huge budget gap today, the challenge tomorrow is continuing to grow our economy. A key way is continued investment in our infrastructure to encourage development and deliver core services - transportation, public safety, and cultural and recreational improvements.

Our budget provides the means to expand our economy with targeted investments in new economic diversification projects. One that’s vitally important to our resource industries is the Port of Anchorage.

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.

To accommodate our state’s future growth, we’re undertaking a quarter of a billion dollar port expansion. This will allow for expanded export of Alaska products, such as naptha bound for Japan and fisheries products to other Asian markets.

And just as the port has served our North Slope oil development with oil field modules built right here, I believe we should be the gateway to the Russian Far East – building modules for development in Sakhalin.

Of course, the best way to balance our budget is to create new economic opportunities that contribute to our tax rolls. Members of RDC know that economic growth for Anchorage is not only good for our city, but for our state as a whole.

That’s why we have an ambitious agenda for Anchorage’s economic development. I believe it starts right here in our business district, taking actions to ensure that Anchorage remains Alaska’s resource development headquarters.

We are working with the private sector to keep taxes low and the business environment stable. This means streamlining regulations, offering development incentives and keeping our city culturally attractive.

It also means working with state and congressional leaders to prove to America that we know how to develop our natural resources and protect the environment. I use every opportunity to convey the message that Alaskans can develop ANWR and our gas pipeline responsibly.

Let me touch on a few specific projects where we are building partnerships to get Anchorage’s economy moving.

Downtown Anchorage. Our vision is a flourishing shopping and entertainment district that attracts not only locals but many more visitors, domestic and world-wide. This means a world-class museum double the current size. It means a fully utilized Town Square.

It means a new convention center capable of attracting scores of big money-making conventions we are missing out on every day.

According to the International Convention and Visitors Bureau, there are more than 450 organizations with delegates of up to 5,000 people who are hot prospects for conventions in Anchorage – if only we had the space. Last year, conventions and events in Anchorage produced $77 million in economic impact across our city and state. That’s from conventions of 1,500 or less.

Just think of the impact from those larger conventions, or it we had the ability to book two or more at the same time.

We’re working with ACVB to put a new convention center back on Anchorage’s agenda. Within the next 60 days or so, we hope to put out a request for proposals from the private sector for a new center.

Our bottom line is this: a new facility must be private sector-built and financed, with backing from an increase in Anchorage’s hotel/motel bed tax. It must make good use of the Egan Center. And it must bring with it co-development and linkage to other downtown development – not just a stand-alone convention center to sink or swim on is own.

A new convention center, coupled with the other downtown development we envision, would help revitalize our city’s business core.

At our community’s southern border is another opportunity of unprecedented potential. That’s taking advantage of Girdwood’s natural assets to make it truly a year-round resort of world-class status.

Just north of the current ski and hotel development is an area known as Winner Creek-Glacier Valley. This area, five times the size of the existing Alyeska resort, is considered the best undeveloped ski terrain in North America.

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.

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.

Fortunately, most of the land is either in municipal or state hands, ready for development. This week, a couple of the nation’s top ski resort experts are here to explore ways to advance the project.

We are working closely with project sponsors and Senator Stevens – who has a warm spot in his heart for Girdwood. We will resolve Girdwood’s land use conflicts to take advantage of this once-in-a-lifetime opportunity that represents a $400 million public-private investment.

Another economic opportunity of great potential is capitalizing on Anchorage’s international time zone advantage to make our city an International Financial Center.

Just as we’re making our mark as a global logistics center, I believe we can muster the financial resources of Alaska’s banks, investment firms and real estate companies right here in mid own to attract a greater share of this high-pay, low impact industry.

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

Alaska’s advantage is that you can conduct business during regular hours here and touch most of the world’s finance markets during much of their business day.

And instead of fighting congestion and crime like in so many other financial capitals, you can be home at a reasonable hour to enjoy dinner with your family, a cross-country ski, or whatever your pleasure.

You have to think big in order to achieve our goal.

I’ve already started talks with some of Alaska’s leading bankers and money managers to flush out this opportunity for Anchorage.

Together, the ambitious projects I’ve touched on today and a few others represent a 1 billion-dollar investment that will create hundreds of jobs in the next 5-10 years.

As you can tell, I’m bullish on Anchorage’s future. After less than 150 days in office, I’ve learned that if you tell people the truth, ask them to get involved and stay optimistic, anything is possible.

Sure, we’ll have some bumps in the road. But if we keep our eye on the future, hold true to our values, and believe in the possibilities of our great city, what we can accomplish together is limitless.

Thank you for having me here today.

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