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Proposed Ketchikan Cold Storage Facility
by Kenneth Duckett


December 15, 2004

To Editor Sitnews:

On Thursday, December 9th the Ketchikan Daily News published a letter to the editor by Mr. Ron Arntzen in which he is critical of efforts to develop a public cold storage facility in Ketchikan. As a member of the current board of directors of the proposed Ketchikan Cold Storage Facility, I feel it is necessary to respond to Mr. Arntzen's letter. In the letter he broadly criticizes the concept of developing a public cold storage and the participation of the borough in the project. Due to the limitations on the length of items that can be submitted to the Daily News under letters to the editor and my desire to try to describe the project in enough detail so that the reader can develop an understanding of the philosophy and status of the cold storage project, I am sending this to Sitnews and hope that you will see fit to put it on your site. If possible, I will try to submit a slimmed down version to the Daily News for possible inclusion under "Point of View". In his letter, Mr. Arntzen makes the following assertions and I will respond to each immediately after it is listed:

"This property {meaning the property in Ward Cove that the borough may give to the cold storage association} was paid for out of taxpayer money and it should not be given away to special interests. Does the borough have so much money it can afford to give away property?"

The concept of the public cold storage facility is that it will be run as a non-profit facility by a volunteer board of directors made up of user groups: 3 fishermen representing different gear types; 3 major users, assumed to be fish processors but who may in fact be a fish waste processing facility or the cruise ship industry; 2 business at large seats from the community of Ketchikan; and a representative each from Metlakatla and Prince of Wales Island. It is intended that having this wide range of interests and potential users represented on the board will result in the development of operating policies for the cold storage facility that will be fair and equitable to all users, large and small. The folks on the present board have donated their time in putting this project together as an economic development effort for the greater Ketchikan region with the hope of providing year-round jobs, directly in the operation of the cold storage facility, and indirectly in the reprocessing of salmon that this facility will make possible during the winter.

"The beneficiary of this giveaway is not the local fisherman, but a huge multi-million dollar seafood processing company."

I believe Mr. Arntzen is referring to the Trident Seafood Corporation. It is certainly true that Trident is interested in using the facility and in fact without their use, the feasibility of the facility is questionable. You may have read in the paper recently that the Norquest plant here in Ketchikan is producing a smoked pink salmon pouch product that is being mass marketed by Trident throughout the United States with a multi million-dollar campaign. For the local plant here in Ketchikan to get that work, it had to compete with Trident facilities in Seattle. If storage for the volume of frozen fish needed to make this product is not available in Ketchikan, then that production may revert to Trident's Seattle plants and Ketchikan will have lost an important opportunity to create more year-round jobs. Trident will be using the capacity of the cold storage facility as a customer and will have no more control over or financial interest in the cold storage than any other company or individual using the facility.

The remarks about the cold storage facility not benefiting local fishermen is also inaccurate. Several small fishing groups have expressed an interest in using the facility. Quite a few fishermen are interested in storing some of the low quality salmon they have caught during the season for use as bait for their crab, shrimp and longline fishing. The reason representatives of the three fishing groups are on the board is to assure that the policies developed for the cold storage facility will encourage individual fishermen and small fishermen's groups to use the facility.

"We all want to support our local fishermen, but they do not need nor can they manage a 10 million pound cold storage."

This is an interesting perspective. Commercial fishermen heard this same kind of rhetoric in the 1970's when segments of the public said fishermen could not develop and manage a hatchery system and it was a waste of public money to make loans available to them. Thirty years later, the Southern and Northern Southeast Aquaculture Associations produce nearly 300 million salmon fry for release in local waters and the sport fishing community, commercial fishermen and processors, large and small, depend in part on this salmon production to stay in business. These regional associations are run by commercial fishermen who numerically dominate their board of directors. The fishermen set both the operating and fiscal policy for the associations. The economic benefit to the region from the Southern Southeast Regional Aquaculture Association in the year 2000 was $28 million, which included $6 million in labor income and 250 annual equivalent jobs (McDowell Group Economic Impact study of SSRAA published June 2001). Based on the evidence sited above, it is clear that fishermen can and do run effective programs. I believe that the economic benefit of the fishing industry on the Ketchikan economy is significantly underestimated by the average citizen.

"I respectfully ask that the borough please reconsider this land giveaway and sell the property at fair market value, rather than 1) Raise taxes and 2) Put local companies out of business."

Mr. Arntzen owns a 1.2 million pound cold storage in Ketchikan, which has been leased to Norquest since its construction. He is concerned, rightly, about the continuing viability of his facility. The board of the Ketchikan Community Cold Storage has indicated to Mr. Arntzen that it could grant him the right of first refusal to store any frozen fish products a customer might want to store in the community cold storage. Such an agreement could help protect his investment in his cold storage. There are other possible ways that Mr. Arntzen could be protected from possible adverse impacts of a new public cold storage.

The question of the proper use of the 8 acres at Ward Cove proposed to be used for the community cold storage is a valid one. I think the best current comparison to draw is the Ketchikan ship repair facility. Without state funding for the construction of the facility, the shipyard would not be here today as the risk was too great for any single private business to initiate such a development. If the shipyard hadn't been built, the jobs now provided by the shipyard in Ketchikan would be located in Seattle or British Columbia.

We have the fish. Fishermen will catch the fish and processors will process the fish. The question is, where will the fishermen live, where will they deliver their fish, and who will process those fish? Currently, two thirds of the fish landed and processed in Ketchikan are shipped south to Seattle to await sale to distributors or reprocessing into a value-added product form. How can Ketchikan capture a portion of this economic activity that it is currently losing by shipping so much of our frozen product south? In my view, one answer, and it is only a single step forward, is to develop the infrastructure necessary to hold more of our fish in our community so that more of the value added work can be done by our residents during the off-season. To me, this means the construction of a public cold storage holding facility in Ketchikan. As in the shipyard, the risk is too great for a single private business to develop such a facility. Government help is necessary. While we are still developing and refining the numbers in the cold storage business plan, it appears that with the contribution of the land at Ward Cove from the borough and the grants from the state and the federal Economic Development Administration, coupled with a private loan, we could run such a facility at a rate competitive with Seattle cold storages.

Fishermen are going to go to where they can get the best service and price for their product. Wrangell is putting in a processing facility to process fishermen's fish on a cooperative basis and they are working on getting funding for a cold storage plant. Petersburg already has funding for their cold storage plant and is a fully supportive community for fishermen. While the Ketchikan cold storage facility is not in direct competition with the facilities of either of these communities, if we, as a community, are unwilling to develop the infrastructure necessary to take our local seafood industry to the next level needed to compete in the world market, our fishermen will migrate to where those services are offered. I think we should work to keep that from happening. The choice is in your hands. I know only too well how we as a community have been burned when past development projects have not worked. If you do not think the cold storage facility has merit, tell your borough assembly representatives and they will not give us the land and the volunteer cold storage board of directors will fold up shop and go away. If however, you would like to further diversify our economy and if you believe the philosophy behind this project makes sense, then please convey your support for the cold storage to your borough assembly members.

Kenneth Duckett
Ketchikan, AK - USA


Note: Comments published on Viewpoints are the opinions of the writer
and do not necessarily reflect the opinions of Sitnews.



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