CIRI is optimistic about Alaska
by Margie Brown, CIRI President and CEO
The 35th Annual Meeting of CIRI shareholders took place on June 7 in Anchorage. I offer my congratulations to returning Board members Penny Carty, Roy Huhndorf, Patrick Marrs and Robert Rude on their reelection to the CIRI Board. I also congratulate and welcome first time Director Michael Thomas. I look forward to working with all of these individuals – and the entire Board of Directors – to advance CIRI’s business objectives. I especially want to recognize outgoing Board member Agnes Brown and thank her for her 34 years of service to CIRI.
Having a cohesive board that is focused on business is essential to CIRI’s continued success. There is a lot of bad news these days signaling a weak national economy and difficult times for U.S. businesses. The daily headlines tell us our nation being headed toward – or already in – a recession. We hear about drastic reductions in residential and commercial property values, weak dollars, record high energy prices and on and on. The economic news in many parts of the country is dismal.
Fortunately, the situation in Alaska is better. CIRI’s home region faces some economic challenges, energy costs being first among them. But CIRI is optimistic about doing business in its home state.
The most important economic trend in Alaska and our nation is the rapid increase in energy costs. This trend is becoming a statewide crisis and CIRI is responding by stepping up oil and gas exploration of its lands and pursuing renewable energy projects. CIRI has negotiated several oil and gas leases and lease extensions that include commitments to drill exploratory wells on CIRI land around Cook Inlet within the next two years.
CIRI teamed with renewable energy leader enXco Inc. in 2007 to develop a Fire Island wind project. The first phase of this project is expected to start generating power in late 2009 or 2010 and will offset the natural gas that utilities currently burn to power up to 15,000 Alaska households. Wind energy tends to be stable-priced energy because it is renewable and does not require fuel. The same will be true for other renewable energy projects that CIRI is investigating, including additional wind sites, low-impact hydroelectric and landfill methane power generation.
CIRI is pursuing several non-energy development projects in Alaska. It teamed with Browman Development Co., one of the nation’s leading retail center developers, to build and operate Tikahtnu Commons in Anchorage. This 95-acre project will be Alaska’s largest retail and entertainment center. Its first store, Target, opens on Oct. 12, and other stores including Kohl’s Department Store, BestBuy, Sports Authority and Lowe’s Home Improvement are slated to open later this year or in early 2009. Regal Entertainment Group plans to open a 17-screen theater complex, including Alaska’s first IMAX, in 2010.
CIRI is also growing its investment in its tourism subsidiary, CIRI Alaska Tourism Corp. CATC, as the company is known, had a record season last year and is off to another strong performance this summer, although high fuel costs are particularly troublesome for its day cruise operations. The company added another 36 rooms to the Seward Windsong Lodge this year, so it now has 180 guest rooms. In addition, CATC has ordered a second 150-passenger catamaran, the Orca Voyager, which will be delivered to CATC later this summer. CATC’s first catamaran, the Aialik Voyager, went into service last summer and demonstrated that catamarans are sound investments because they comfortably carry more passengers and provide faster, smoother, quieter rides while burning more than 40 percent less fuel and producing fewer emissions than our similarly-sized conventional-hull vessels.
All of these investments in Alaska are in keeping with our strategic plan that calls in part for utilizing the company’s Alaska business infrastructure and focusing on its energy and real estate interests. As we move into the second half of the year, CIRI’s staff is looking forward to working with the CIRI Board to advance company interests. It is this teamwork that will allow us to make the most of the diverse business opportunities that are available to CIRI, particularly in Alaska.