Pelican fears loss of fish plant

Foreclosure may bring new opportunities

Posted: Sunday, August 23, 2009

Pelican is a fishing town without a fish processor, and that means it is a town facing an uncertain future.

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Klas Stolpe / Juneau Empire
Klas Stolpe / Juneau Empire

Two operators of the Pelican Seafoods plant have failed to make a go of it in recent years.

The plant, the biggest business enterprise in Pelican, is now closed with owner Ed Bahrt & Associates LLC apparently resigned to losing it through foreclosure.

Once and future owner Kake Tribal Corp. says it expects to reacquire the plant through a foreclosure Sept. 15. It is no longer interested in trying to operate a seafood plant far from its Kake village roots.

"We're going to have it up for sale again after the foreclosure," said Steve Malin, CEO of Kake Tribal.

Kake bought the plant hoping to develop a resort there, but abandoned those plans years ago, he said. An attempt at running Pelican Seafoods itself failed, and the plant was sold to Ed Bahrt's company in 2006, after having been closed for two years. Bahrt has failed to make payments on the plant, which is no longer operating.

Pelican Mayor Patricia Phillips said losing Pelican Seafoods permanently would be a crippling blow to the community.

"It's a really big deal; we don't have that many businesses here," she said.

It is not fully clear why Bahrt's attempt to run the plant failed.

"It was a game of deception on the part of Ed Bahrt," Phillips said.

Bahrt apparently didn't have the financing needed to operate the plant, Phillips, Malin and others said.

Fish plants tend to need a lot of capital. They have to buy fish from fishermen and pay employees, but don't begin to bring in revenue until product is sold months later.

"It really hurt the community, tore it up really," Phillips said. "Ed Bahrt led people to believe that he had it together," she said.

Numerous fishermen who sold fish to Ed Bahrt in the time he operated the plant say they haven't been paid.

At least three Juneau fishermen are among those who have liens or lawsuits against Ed Bahrt & Associates. One of those is John Moller, rural affairs advisor to Gov. Sean Parnell and former Gov. Sarah Palin, who won a default judgment of $7,475.

Bahrt also was involved in an even bigger fish plant collapse in Wrangell, where he was involved in the multimillion dollar bankruptcy of Wrangell Seafoods. The company sued Bahrt in 2008, and won a judgment against him, but Bahrt has a claim against Wrangell Seafoods as well.

Bahrt, by e-mail, declined to speak with the Empire, after first asking, "Who have you talked to?"

Seafood expert Terry Riley in Washington state said Pelican Seafoods might still be viable, but that Bahrt may not have been the right person to run it.

"He's not really an operations guy, he's a marketing guy," Riley said.

Pelican's remote location may mean some higher costs for shipping and operating, but it also has access to hydroelectric power that can provide a dependable source of fixed-rate power for the plant.

"I think it can be a viable operation," Riley said.

It would take an operator with management ability, as well as access to capital, he said.

Kake Tribal had interviewed Riley for its CEO position, but the financially strapped village corporation decided instead to exit the fish processing business entirely.

Mayor Phillips said the city's commercial fishermen need a processor in the area, and provide a ready source of product for Pelican Seafoods.

"A lot of them would sell there if it was operating," she said.

The local fishing fleet is now served by tenders for other plants at the mouth of Lisianski Inlet. Sometimes a tender for Seafood Producers Co-op in Sitka will tie up at the dock in Pelican, Philips said.

Phillips, a 35-year Pelican resident, said when the plant was operating it also provided fish tax and sales tax revenue for the city, and was the largest customer for the city utility.

She said if Kake reacquires the plant at the foreclosure auction, she hopes it will move quickly to sell it to a strong operator.

"It would be great to get one of the big name companies in here and get this plant operating again," she said.

Pelican is currently upgrading the power plant with the help of the state, hoping that a new plant operator would need the power.

That hydro power can be a key advantage, as fish plant blast freezers are huge consumers, Phillips said.

"It's an incentive to operate this plant," she said. "The community is in a position to provide a real competitive power rate," she said.

Also tied to Pelican Seafoods is the Pelican General Store, now closed, and the plant's ice production equipment, now operating under an arrangement with Bahrt.

Kake Tribal also operates the city's electric system, water system and fuel dock, which are owned separately from Pelican Seafoods.

"The general store was part of what was sold to Ed Bahrt, and is coming back to us," Malin said.

Malin said that without the seafood plant, Kake Tribal wouldn't need power utility and would be willing to sell it and the fuel dock.

"We're not really marketing it, but it is questionable if we would want to continue to own them," he said.

The city of Pelican is currently studying whether it can purchase the utility and fuel dock, Phillips said, but the fish plant itself is probably too big to even consider buying.

The ice chute, a necessity in that community, is currently being operated under an arrangement with Bahrt, Phillips said. The concern is that a Kake Tribal or a new owner may not keep producing ice.

"No ice machine is really going to cripple the community," she said. "We're a commercial fishing town, we need ice to ice our catch," she said.

Kake Tribal's Malin said the plant is no longer part of the corporation's plans, but may have a future with someone else.

"I'm not a fish plant guy, but I've got other people that tell me they think it is viable," he said.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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