1. Prepared for: Ketchikan Gateway Borough Planning and Community Development Prepared by: McDowell Group, Inc. Juneau · Anchorage September 2010 McDowell Group

2.  Economic conditions  international/national  state/regional  local  Ketchikan Economic Indicators 2010  Alaska Forward  Other McDowell Group research  Shipyard  Arts  Sportfish  Visitor industry

3.  2,000 assignments since 1972  Staff of 14 with offices in Juneau and Anchorage  Multidisciplinary research and consulting  First Ketchikan projects in 1974 :  Cedar mill feasibility  100 Ketchikan-related assignments

4. 2010  Ketchikan Economic Indicators  Impact of the Arts in the Visitor Industry  Impacts of Nonresident Sportfishing  Economic Benefits of Shipyard Improvements  UAS Ketchikan Campus Benefits Study

5. Source: International Monetary Fund

6. Source: U.S. Bureau of Economic Analysis

7. Source: U.S. Bureau of Labor Statistics

8. Sources: U.S. Bureau of Labor Statistics and Alaska Department of Labor and Workforce Development

9. Source: Alaska Department of Labor and Workforce Development

12. Source: Alaska Department of Labor and Workforce Development, and U.S. Census

15. Source: U.S. Bureau of Economic Analysis

16. Employer Avg. Monthly Employment Ketchikan Gateway Borough School District300 - 349 Peace Health Ketchikan General Hospital300 – 349 City of Ketchikan300 - 349 Alaska Department of Transportation & Public Facilities300 - 349 Trident Seafoods150 - 199 Community Connections150 - 199 Ketchikan Gateway Borough150 - 199 Alaska Ship & Drydock100 - 149 A&P (Williams)100 – 149 Safeway100 - 149 Source: Alaska Department of Labor and Workforce Development

17. Source: U.S. Bureau of Economic Analysis

23. Source: Ketchikan Gateway Borough

25.  Prepared brief broad-brush summaries of current conditions in a variety of sectors in Ketchikan’s economy.  Included:  Overview of current activities/status  Description of multiplier effects  Outlook

26.  Ketchikan has diverse economic drivers  Tourism, seafood, shipyard/marine industries, federal government (USFS, USCG), state government, forest products, and others  Capacity to influence economic drivers  Tourism (marketing, infrastructure)  Shipyard/marine (investment, workforce training)  Seafood/mariculture (value added)

27.  Ketchikan’s economy has stabilized after years of decline  But tourism issues and national recession dampen short-term outlook  Ketchikan and Alaska have fared better than other parts of the country during recession (diversity has helped)  Potential for proactive economic development to produce results

29.  Alaska Partnership for Economic Development (APED)  A collaboration between the state’s regional economic development organizations (ARDORs) and other economic development organizations

30.  Phase 1– Situational Analysis  an “economic reality check” now completed (www.alaskapartnership.org)

31. Alaska's oil and gas sector is massive (15% of the national supply), but in decline. Without any new developments, we expect current fields to be producing only about one- third of their current levels by 2030. Alaska's oil and gas sector is massive (15% of the national supply), but in decline. Without any new developments, we expect current fields to be producing only about one- third of their current levels by 2030.

32. Rising oil prices have mitigated the impact of declining production levels. Strong driver of state revenue and personal income support. Rising oil prices have mitigated the impact of declining production levels. Strong driver of state revenue and personal income support. Annual Average Prices

35. State and Local Taxes As Percentage of Income, 2008 Alaska does not levy individual income tax and state sales tax and offers overall low business tax environment. Source: Tax Foundation

36. R&D Expenditure as Percentage of Gross State Product, 2005 Source: National Science Foundation and Bureau of Economic Analysis Source: Tax Foundation Private Industry contributed only 12% of the total R&D spending in the state.

38.  Lack of statewide leadership and coordination of economic development resources seen as obstacles, past and present  Alaskans continue to view natural resources as the greatest opportunity for economic development  Greatest barriers include high cost of transportation, cost of energy, and federal regulations

39.  Phase 2: Strategy Development  Leadership Council formation  Select clusters for priority attention  Identify top-level leaders in each cluster  8-10 month cluster development strategy effort  Generate cluster-specific priorities  Identify and address impediments to growth  Integrate into broad statewide development strategy

42.  Annual average employment of 120 workers in 2009, estimated payroll of $7 million  One of Ketchikan’s largest employers  5 th largest employer in Ketchikan in terms of employment and 2 nd largest in terms of payroll  Among the highest wages in the community: average annual earnings of $55,400, 45 percent above the Ketchikan average

43.  In 2008, ASD spent $5.3 million with 130 Ketchikan businesses and organizations  Including multiplier effects, the shipyard accounted for 170 jobs and $8.75 million in payroll  The counter-cyclical seasonality of the ship repair business is also an important local benefit

44.  Potential to become a fully sustainable, competitive marine service center for vessels operating in the North Pacific and the Arctic Oceans  With increased capacity and efficiency, shipyard –related employment could grow to 360 jobs and with multiplier effects, to 570 jobs

46.  Project Focus: “Tangible Arts”  Painting, drawing, print making, design, photography, sculpture or carving of wood, stone, metal and other materials, ceramics, glass, weaving, etc. (excludes performing arts)  Art created locally and sold to visitors brings new dollars into the local economy.

47.  Opportunities  Nearly 1 million visitors (mostly cruise ship passengers)  Demand for authentic local art  Provides opportunities for local artists to make a living at their craft  Community art  Totem, Pile Caps, Stain Glass Panels, Salmon Bus, UAS Mural, Saxman Village, Southeast Discovery Center, Totem Heritage Center  Promoting the arts  KVB, KAAHC, Attractions, Businesses, Individual Artists

48.  An important component of Ketchikan arts (economically and socially) is a strong Northwest Coast Native art tradition.  Visitors who spend even a small amount of time in Ketchikan will be exposed to Northwest Coast Native art.

49. Direct Indirect & Induced Total Impact Employment (Artist & Retail)11525140 Labor Income (artists income/retail payroll & benefits) $1,280,000$250,000$1,540,000 Local Spending for Goods & Services (Artist & Retail) $795,000$290,000$1,085,000 Total Spending Impact$2,075,000$540,000$2,625,000

51. Ketchikan & POW License Sales and Guided Sportfishermen, 2008 POWKetchikan Total Nonresident License Sales9,50030,400 Nonresident Guided Fishermen9,10020,000 Percentage of Guided Nonresident Fishermen96%66% Source: Alaska Department of Fish and Game

52. Estimated Sportfishing-Related Ketchikan Employment 2008 Guided Sportfishing Employment240 Unguided Sportfishing Employment 45 POW Businesses Ketchikan-based Employees 20 Retail Sector Employment35 Total340

53. Ketchikan-Based Employment & Payroll 2008 Employment340 Total Payroll$5,185,000 Average Payroll$15,250

54. Total Sportfishing-Related Expenditures in Ketchikan 2008 Ketchikan Sportfishing$11,893,000 POW Sportfishing-Related$3,732,000 Total$15,632,000

55.  Per-passenger spending $135  Total passenger spending $115 million  Cruiseline spending $35 million  Total spending $150 million  Sales tax revenue and dock moorage fees of $11.6 million

56.  Total visitor industry spending of $163 million  Summer direct and indirect visitor industry employment of 1,500  Total labor income of $50 million  14% of total Ketchikan employment and 12% of total Ketchikan labor income

57. Prepared for: Ketchikan Gateway Borough Planning and Community Development Prepared by: McDowell Group, Inc. Juneau · Anchorage September 2010 McDowell Group