Mobile Edition
Print
Get the Mag
Weekly UpdatesToday, 169 Alaska Native Village corporations, formed under the federal Alaska Native Claims Settlement Act of 1971, operate from Prince William Sound to the Aleutians to the Arctic Slope, covering the state of Alaska, ranging from as small as 89 shareholders to more than 2,600. Besides investments in real estate and stock/bond portfolios, Native corporations now look to contracting and a variety of business options. With revenue and assets in the millions, these organizations have a huge impact on business in the state of Alaska.
SUCCESS IN FEDERAL CONTRACTING ARENA
Chenega Corp., in the Prince William Sound region, continues to have dramatic success in professional services contracting for the federal government. Chenega placed sixth in Alaska Business Monthly's 2004 "Top 49ers" of Alaska-owned companies, based on FY 2003 gross revenues. The company has doubled revenue growth from 2003 to 2004 and ended up with sales for FY 2004 of $481 million. Significant to the phenomenal growth in 2004 was Chenega's continued expansion into information technology, security and Intel/military operations. "Many of the services we sell are higher end," says Jeff Hueners, chief operating officer, "with top-level scientists, engineers, and various technology labor categories."
All Alaska Native corporations are defined as Indian tribes for purposes of eligibility in the U.S. government's 8(a) program. Chenega owns several 8(a) companies that provide services within the federal market space, including information technology, base operations support, security services, training, logistics, Intel & military operations, telecommunications, environmental services, light manufacturing and hotel management. With 60 contracts in 34 states and seven countries, Chenega continues to build on a solid base of experience and performance. Chenega continues to leverage its 8(a) status by seeking government contracts that remain the core competency of the corporate business model.
Chenega currently has 142 shareholders residing in Chenega Bay, Anchorage, Valdez, Cordova, Tatitlek, Talkeetna and Lower 48 locations.
Chenega's business success has translated into a direct benefit to its shareholders by: increasing the number of job and internship opportunities for shareholders; increasing the number of scholarships available for training shareholders; increasing salaries and benefits paid to shareholders; increasing dividends; providing an elder's dividend benefit; providing a funeral benefit; and increased spending in cultural and community programs.
"The increase of benefits and opportunities for Chenega shareholders is in direct correlation to the financial success of our business enterprises made possible through the federal law provisions of 8(a) contracting for ANCSA and tribal organizations," notes Charles W. Totemoff, president/CEO of Chenega Corp. "The 8(a) program has been key to the economic development of Chenega Corp. and many other Alaska Native corporations."
THE NO. 1 FISHING PORT IN THE NATION
Ounalashka Corp. in the Aleutians is the major landowner in Unalaska, the No. 1 fishing port in the nation in volume and value.
"A small boat harbor is needed," says CEO Wendy A. Svarny-Hawthorne. And Ounlashka is taking steps to make that happen. The first requirement was an environmental impact statement. That has been signed off. The next step is funding for pre-design and lining up support services, then signing a lease and getting buildings.
Because its mission statement is to contribute to other services besides dividends, education is a priority for Ounlashka. One student, who went through an accounting program at Alaska Pacific University and then a master's program, now works in the position of controller.
Svarny started as the secretary/receptionist and was mentored into the CEO position. She was hired before she finished her master's. The next mentoring program is designed for a civil engineer.
Oil-spill cleanup remained one of the main activities this summer. This work brought business to town, but meanwhile the small crab fishery was closed. Seafood processing is a big part of the business in the village.
"We are busy all the time with projects with others," says Svarny. "These involve our input or our land."
Ounlashka is heading for final conveyance of land under ANCSA. BLM surveys are being completed.
Unalaska has 4,000 permanent residents, but that more than doubles to 10,000 in business season.
Ounlashka has done better every year, says Svarny.
Last year was a record year, plus a 2004 tax refund allowed for a special distribution from interest to shareholders in June of this year. The net income for 2004 was $2.4 million. With the tax refund, the income was $4.2 million. The rest of the tax refund money will be seed money for a settlement trust that will grow like a permanent fund.
Ounlashka has been paying quarterly dividends. The dividend per share for 2004 was $13. Ounlashka's main business is land leasing and development.
The corporation's net profit reached a record 34.5 percent of revenue at year's end in 2000.
CULLY CORP. BACK ON ITS FEET
Cully Corp., a village corporation from Point Lay, located within the Arctic Slope Region Corp. area on the North Slope, went out of business Oct. 30, 1978, but is now back on its feet.
After a series of different management teams working to bring the corporation to where it is today, the current president/CEO, Elsie Hendryx, says Cully is working to pay back a debt. There are no dividends until the money is paid back, however the corporation is slowly working itself back to a profit situation. Within the next three years, Cully anticipates being able to pay back all the debts and start giving dividends.
Cully offers benefits to its shareholders in job opportunities. Cully also has a joint venture with SKW/Eskimos Inc., a subsidiary of Arctic Slope Regional Corp., called Point Lay Constructors. All jobs are located in the village of Point Lay. The emphasis is on local hire.
Cully is working its own ventures and has contracted with the North Slope Borough to run the water and sewer contracts filling four job positions with the village water/waste water contract. Cully also has contracted with the U.S. Post Office for the post office contract in Point Lay.
After the North Slope Borough closed the local washeteria in July of 2004, Cully took over, remodeled, bought new washers and dryers, hired staff, and reopened in July of 2005.
Other negotiations with North Slope service projects that are being released are in process. Cully also has opened a video rental and a concession store, employing two people.
Cully is working with the U.S. Air Force that is closing its defense early warning system site and in the process of cleaning of contaminants. The land will be turned over to Cully Corp. next year as Cully qualifies to select land, according to the ANCSA ruling.
Cully has 89 total shareholders: 23 shareholders in Point Lay, 23 in Bar-row, 24 in Anchorage and the rest scattered throughout the state and in the Lower 48.
POTENTIAL GOLD MINE
"Donlin Creek is estimated to be one of the world's largest undeveloped resources," says Kuskokwim Corp. (TKC) President Maver Carey. "Its inferred gold resources are estimated at 14.3 million ounces." (Note: gold was at $426/ounce in July.)
The open-pit mine could yield 600,000 ounces of gold a year and create hundreds of jobs.
Many envision this as a world-class project. The economic opportunity offers the possibility of a road, a port, fuel storage and potentially an airport.
Transmission lines and power plants also may play a major role in the development of this project. Building the necessary road, docks, power plant and other facilities could cost $1 billion.
As the surface estate owner, TKC has formed a construction company called Suulutaaq LLC, which will work closely with Calista Corp. and Placer Dome to build the infrastructure for the mine.
Preferring to not be dependent on its stock and bond portfolio, TKC has moved into operating entities and utilizing its 8(a) status by looking for federal government contracts.
Recently TKC formed a new operating company, TKC Development Inc., offering management services, telecommunications, information technology, product development, construction management, facility operations and operations support.
To diversify its investment portfolio, TKC is continuing its relationship with JL Properties, one of Alaska's largest real estate brokers, by its investment in the Calais office buildings in Anchorage, Elmendorf military housing Phase II, Alaska Pacific Environment Services for waste management, and other properties.
The corporation is proud of the fact that the children of its shareholders continue to be enrolled. "While we started with a little more than 1,100 shareholders, we now have more than 2,600 share-holders," says Carey. "We continue to pay consistent dividends and have paid over $6 million in total distributions to our shareholders since 1981."
RELATED ARTICLE: Native organizations have a huge impact.
For 2004, Native organizations comprised 43 percent of Alaska Business Monthly's top 49ers in business. Of the top 10, six were Native corporations. Eight companies have made the list for 20 consecutive years. Of these eight, four are Native corporations.
Data for 2004 from the Native American Contractors Association indicates 15 Alaska Native corporations with 8(a) businesses provided $27.14 million in dividends and $5.39 million in cultural and social program donations.
These corporations also were responsible for scholarship awards from 1999 to 2004 for shareholders and descendants in the amount of $14.27 million and payroll within the state of Alaska of more than $141 million.
FEED