Trading resources for tourism

Hoonah prepares for cruise ships to boost flagging economy

Posted: Wednesday, July 16, 2003

HOONAH - About 15 years ago, Hoonah's seine fleet was the largest in Alaska. The fishing was plentiful and the prices were high. Business also was good for the loggers who came to town in the 1970s.

These days, the town of 900 has only two seiners. The flagging timber market has caused the local logging company to reduce its staff to 80 people, down from about 200 in the 1990s.

Hoonah Mayor Alf "Windy" Skaflestad predicts logging will all but stop within five years, a casualty of market conditions and environmental protections on the Tongass National Forest. He says he'd like to be optimistic about a resurgence in the fishing and timber industries, but feels he has to be practical.

"It's like going to Las Vegas and putting quarters in and pulling the handle. It's a gamble," Skaflestad said Friday in his office. "As a community, we can't take that gamble."

So what does a small Alaska town with a historically resource-based economy do when timber isn't selling very well and king salmon fetch just 85 cents a pound?

It looks to Southeast Alaska's other industry: tourism.

On May 11, 2004, Celebrity Cruises' Mercury will steam into Hoonah, on the north end of Chichagof Island about 40 miles southwest of Juneau. Project marketers have named the destination "Port Icy Strait."

The Mercury will anchor off-shore and send tourists via lightering boats into a wooded park that will include a restored cannery, a Native cultural center with a Tlingit dance troupe, whale-watching and bear-watching tours, a totem carving hut, a family style restaurant, and multiple retail outlets.

The Mercury, the Celebrity ship Summit, and Royal Caribbean International's Vision of the Seas will pay 33 visits to Hoonah in 2004, said Johan Dybdahl, president of Point Sophia Development Co., which is developing the cruise ship destination. Dybdahl is a former executive of Sealaska, the Juneau-based regional Native corporation, and a longtime Juneau Planning Commission member.

The company is a joint venture between Hoonah's for-profit Native corporation, Huna Totem Corp., and the Juneau-based guiding company Koma Sales Co.

Skaflestad said he was wary of the project at first.

"I was a little skeptical. We all were," he said. "But they've got the contracts, and it looks much better. Right now they're employing 60 people, and that's a great shot in the arm."

If everything goes as planned, Hoonah will get a much larger injection come next tourist season.

According to a McDowell Group report completed in May, when the facilities open next spring, they will generate 298 direct year-round and seasonal jobs and 89 indirect year-round and seasonal jobs, bringing in an annual payroll of $3.5 million in wages.

In 2008, when the destination is slated to reach full capacity, it will offer 603 direct jobs and 241 indirect jobs bringing in a payroll of $9.6 million.

As the main attraction, the cannery will include a working display of machinery dating to the early days of commercial fish processing in Alaska, said construction manager Jon Kveum.

The old machines still run on belts, and will do so in the display. Visitors will get a glimpse at an old cannery operation, though the machines won't actually can fish.

"At one time there used to be 23 active canneries in Alaska. Most of them have burned and are gone," Dybdahl said. "This will give you a look at what canneries looked like."

The facility will include museums about Hoonah history and the history of the fishing industry, as well as space for at least 18 retailers, a lounge and snack bar.

The nearby cultural center includes a performance facility for a Native dance troupe, a museum and more retail space.

It's an attractive prospect for a town whose economy has been cut in half in the last decade.

Terry Barry, general manager of Hoonah Cold Storage, said that while the facility handles a good deal more fish than it did 15 years ago, the value of the fish has plummeted.

"Whoever would have thought that black cod and halibut would bring three and four times what a troll-caught king salmon would bring?" Barry said.

He said many trollers have opted not to fish, and the harbor is full of boats.

Whitestone Logging Inc. owner and manager Cliff Walker said the local timber industry is in a recession, having been slowed due to market conditions.

"The well has definitely not run dry. The people that I work for have the ability to slow things down," Walker said.

Production has slowed considerably, according to general manager Wes Tyler.

Tyler said Whitestone logged as much as 90 million board feet annually in Hoonah for Native corporations and pulp mills in the 1980s. When the pulp mills closed in 1994, production slid to about 40 million board feet.

These days, Walker said, Whitestone logs about 25 million board feet per year in Hoonah.

Walker said part of the reason the company employs fewer people now than it did 10 years ago is that it has begun using more machinery.

"By being mechanized we employ less people, and when we employ less people, less revenue goes into the community," he said.

Michael Sheehan, spokesman for Royal Caribbean Cruises Ltd., said the cruise line will reduce some of its Sitka calls and eliminate its Valdez stops to make room for the new destination.

Sheehan said the Hoonah addition is the first time in recent memory that a new Alaska port has been added to one of its cruise itineraries.

"It is a new and different port of call. It will provide a significant glimpse at a very naturalistic experience of Alaska," Sheehan said. "We are optimistic that things will go well."

Sheehan said it's possible the company could add more calls in future seasons.

The town government hopes it will, and is working on building cruise ship docks for the 2005 season, Skaflestad said.

He said the town is trying to secure an $8 million federal grant for the project.

The mayor isn't too worried that tourism will impact the town negatively.

"We need the influx to survive," he said. "We're looking at the tourism to kind of rebuild our economy. People are pretty much for it. I really haven't heard anything negative about it."

Dybdahl said he has only received positive responses as well.

"So far we have had about 99 percent support, and I haven't heard from that other one percent," he said.

Masha Herbst can be reached at masha.herbst@juneauempire.com.



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