By WIN GRUENING
It is axiomatic in residential real estate sales that there are three important considerations in determining the value of a property in any community: Location, location, location.
A similar maxim applies to the economy and population.
It is population that drives the number of employers and employees, renters and homebuyers, producers and consumers – even the number of school age children. This, in turn, determines the availability and quality of products and services (including schools), the discretionary income of residents, the number of businesses and individuals paying taxes, and ultimately, the financial health of the community.
Of course, this is somewhat of an over-simplification. A community’s demographics can also affect the economy. What is the ratio of dependent-aged residents to working-age residents in the population? And does the economy have sufficient and diverse private sector businesses to produce goods and services that generate positive economic growth?
Government doesn’t “produce” anything. Without the taxes on the profits generated by the private sector, government could not support itself or provide services to its citizens.
Government’s role in the economy should largely be relegated to facilitating the formation of new private enterprises, reducing barriers to job creation, and promoting fiscal policies that keep our community affordable.
This is pretty much Economics 101, but, for some reason, the City and Borough of Juneau (CBJ) Assembly cannot grasp the implication s of ignoring it.
I recently wrote about the troubling trend in Juneau and some other Alaska communities that are facing continuing declines in population. Historical population estimates from the Alaska Department of Labor indicate that Juneau has slowly been losing population since 2015.
There seems to be little effort toward reversing this trajectory.
For example, consider the status of two very large projects, seemingly in limbo, that would attract millions of dollars in private investment in Juneau’s recovering visitor industry. I am referring to the long-planned Archipelago Project and, more recently, the Norwegian Cruise Line Dock Project.
The Archipelago Project would have converted an unimproved parking lot on South Franklin in downtown Juneau into 20,000 square feet of prime commercial space — 75 percent of which would be designated ground floor retail for a variety of tenants as well as kiosks for local food vendors and other small businesses catering to visitors. The project addressed concerns about managing increasing numbers of cruise passengers as well as allowed a major private investment on the Juneau downtown waterfront.
The City and Borough of Juneau spent about $1 million over several years in decking over the adjoining city property in conjunction with the project. Archipelago was also eyed by City Manager Rorie Watt and his staff as a site for a new city museum.
Unfortunately, the Archipelago project, as designed, has now been shelved after it stalled amid negotiations over required parking spaces. Now, who knows when the property will be developed or whether a future project will be equally as advantageous to the city.
Norwegian Cruise Line has proposed building an additional cruise dock in Juneau. As envisioned, the project would be a world class venue, incorporating the long-planned Alaska Ocean Center, a connecting seawalk, and local retail and cultural activities. Below grade parking for buses will provide for public green space and waterfront access.
The project would reduce congestion by diverting passengers from the downtown core by reducing bus traffic through the center of town.
Norwegian has been slowly navigating its way through a maze of government red tape, reviews, and requirements. Finally, the Assembly authorized Manager Watt to begin negotiations over access to city tidelands, allowing Norwegian to apply for permits which will trigger a lengthy public process. Several assembly members expressed reservations, some believing the process was moving too fast. Norwegian has already spent in excess of $20 million in land purchase and planning and design since 2019.
Given Juneau’s negative population trends, it’s hard to understand the apparent resistance to these projects, and others, like a road connecting Juneau to Haines and Skagway. Each would attract new residents and jobs, and outside investment, eventually resulting in a substantial increase in CBJ tax revenues and beneficial economic growth.
Where is the urgency to get Juneau’s economy back on track?
After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening began writing op-eds for local and statewide media. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations and currently serves on the board of the Alaska Policy Forum.
Thank you Win. I’m not sure the folks that are generally the stumbling blocks will ever really understand the meaning of a physical economy and the advantage of producing in a 1st world country in a responsible manner. But we can try. Keep up the good work.
Econ 101- Remember the images of 50,000 people racing their wagons to get Oklahoma land? Cheap land will get you population. Access to land will lower property values (we all want affordable housing, right?). Who controls access to vast amounts of land? If you really want to help underprivileged populations, open up the land.
If one truly believes that human activity is causing evil climate change, one variable which can be adjusted to counter that result is to reduce the number of humans. To what extent is that approach guiding decision-makers in Juneau? Asking for a friend.
Where is the urgency to get Juneau’s economy back on track?
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There is no urgency arguably because rulers and ruled appear to have accepted, for starkly different reasons, that Government will take care of Juneau’s economy.
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After all, government is the cottage industry that sustains Juneau’s economy, yes?
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‘Government doesn’t “produce” anything. Without the taxes on the profits generated by the private sector, government could not support itself or provide services to its citizens.’
This concept doesn’t exist with the liberals and the democrats.
Juneau’s entire city council and all their newly appointed “committees” want big government and they hate small business owners. Case in point, over 50% increase in commercial property valuations with the resultant huge tax increases. The rationale? The Council says Systemic Equalization. They will make things equal by pricing commercial real estate investors/owners out of their own properties. This ties in with the mindset of “If we need more money, we’ll just raise taxes.” They’re keeping their promises.
Better Plan: Stop artificially propping up Any aspect of Alaska. You advocate spending huge amounts of money as a plan to support 4% of Alaska’s population.
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The correct response is; no.
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Move the capital to Anchorage to help stop the bleeding. Once that’s done let Juneau return to its rightful dormant state. It might’ve made sense 115 years ago when there was a Juneau and there wasn’t an Anchorage but Juneau’s been on life support for decades and it’s long past time to yank that plug.
Bravo! And most of Juneau could move back to Portland.
Are you sure the government doesn’t “produce” anything?
We kinda need the Army, the Navy, the Air Force, the Marines, and the Coast Guard. (Okay, we don’t need the Space Cadets.)
And we kinda need the roads. Bridges. State Troopers. Courts. Judges. District Attorneys. Prisons. Snow plowing. Airports. Regulation of communications, which prevents some idiot jamming cell phone towers. Public schools. Parks. Ports. The mailman in his little truck with the red and blue stripes. Surveyers who have established the grid lines so we can build the roads and bridges. Safe drinking water. Sewage treatment plants. The dump.
If I am in an accident on the Glenn I want that big red ambulance with the sirens and the red flashing lights to arrive as soon as it can. And it will get there sooner because the Anchorage Fire Department pays paramedics to respond 24/7/365. And pays for the gas and the maintenance, and pays the police officers who will block traffic so I am not run over again while I’m lying on the road.
And are you in favor of border control?
None of these grow from magic fairy dust. Governments produce them.
Yep, it takes taxes to support the government to provide the services. And yes, we can disagree about priorities, about more spending on one category or less spending on another.
But I don’t want to live in a wild west without a government producing services. Do you?
You must be either a recent graduate of government schools or are joining Slo Joe in dementia; that is about the dumbest screed I’ve ever read, and was obviously produced by someone who had exactly zero understanding of economics.
Government doesn’t produce ANY of those services; government provides those services with the consent of the governed using funds confiscated, forcibly if necessary, from those governed. Obviously, we who paid taxes wasted a lot of money on your education.
Hi Art,
The more insults you throw, the easier it is for everybody to understand that you don’t have a rational argument to support your position. You just throw insults.
Keep it up. You’re doing great work.
Okay, we agree its generally true that ad-hominem criticism discredits its source in debate. However, Art’s reply is an exception because it is fundamentally accurate.
To elaborate, I suggest you google the terms “basic industry” and “economic base.” As economic base and Juneau specifically, study the equation LQ=ei/e//Ei/E. I also suggest you read “Free to Choose–Friedman,” “Basic Economics–Sowell,” and the classic “Wealth of Nations by Adam Smith.”
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A clear reading of the referenced sources will show any open-minded person that government produces nothing; it only distributes what it appropriates from actual producers.
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In summary, we our intent is not to personally criticize, belittle, or humiliate anyone. We sincerely want to sharpen each other to uplift our culture. I am sure Art was expressing nothing more than a fleeting moment of frustration.
Excuse the little typos…. a bane to our existence.
I’m not that nice Wayne, I tend to tell stupid people that they’re stupid. The reason so many people remain stupid is that people are too nice to tell them that they’re stupid.
An ad hominem argument is an argument in which you seek only to discredit the man, “ad hominem” means to the man. I first argued to discredit the man, then argued to discredit his stupid position.
Slipstream, the only good part of your 3rd grade monologue is you being run over while lying in the road. A satisfying sentence!
Government produces nothing. Government is constitutionally tasked with certain duties, some at the federal, some at the state level, and some locally, for which we pay taxes. I suggest that you never leave Anchorage, because out at about mile 132 of the Glenn you will get highly motivated volunteer EMTs from Glennallen about an hour after you call. Government is a necessary parasitic organization which we tolerate so long as our hard earned money is wisely spent in our favor. But when there were not public roads there were private toll roads, private dumps, private utilities, etc. And it worked.
And are you in favor of border control? Very much. Too bad the current regime chooses to ignore it.
By wild west do you mean Alaska? A lot of Alaskan natives solidly live…right there. Your views are not mainstream just so you know in Alaska. You have to fly 45 minutes by air to get out of “Anchorage” air space. Within that airspace are a lot of outhouses, etc. Like it or leave it. Some of us object to the policy of country building by development policy of Anchorage first. When Alaska “became” a state I remember that was not our mantra. Why is it unstated public policy now? Oh thant gangsta NATO and its sweethearts nestled into Anchorage. Gimme a bike path cuz I want to play on it. Said no brilliant person ever.
Norwegian Cruise Lines and it’s primary partners have alienated the residents of Ketchikan, building their facility at Ward Cove and putting in very selective gift shops and eateries in the renovated terminal outside of town. Downtown Ketchikan shops have been shut out as a result. Is the same principle destined for Juneau?
Mr Gruening- assuming the property for the designed archipelago project is private property why is Juneau municipality and borough involved?
Further if it is not private property why does a govt entity own property? When the leadership changes so will the desires and direction.
Privatization is the solution.
Remember vote third party!
Chris
Google the terms “zoning laws, land-use laws, zoning codes” as regards government regulation of private property. As to government owning property, please understand the USA is a full-on socialist country. Alaska is the ultimate example of that socialism. The biggest land-owners in Alaska are the federal and state governments. The Borough of Juneau owns all but very few of the harbor, recreational, (ski, swim, etc) and entertainment enterprises in our community.
Juneau has the economy it wants. Ergo, no urgency.
As long as we host the capital, nothing will change
I’m gonna try it this way. Maybe it will get past the censor.
Juneau’s powers that be have zero vested interest in allowing competition and economic growth in their socialist utopia.
Take as old as time: follow the money
Win, I appreciate your desire for development and the benefits it would bring. I see three blockages: 1. Juneau is a government town (read that lefty by nature); 2. eco-extremists; 3. human nature – no one wants change, even if it is beneficial. Best wishes.
1. Move the state capital to a population center such as Anchorage, Wasilla or Fairbanks, so the majority of the state’s constituents can have ready access and keep and eye on them.
2. I don’t like taxes any more than anyone else, but if I do I want it to benefit residents rather than Outsiders. As an alternative to blindly giving away Alaska’s resources and kowtowing to out-of-state and foreign-owned tourism, recreation, hunting and fishing industries, how about imposing a statewide seasonal sales tax, mid-May through mid-September, on all services rendered and goods consumed during that period (with one exception – food)? That should get you enough money to build out another venue in Juneau for your tourists. And maybe someone else in Alaska will benefit from it, too.
With all sincerity… art please run for governor
Thank you, but I have a bad temper, a foul mouth, and I have actually accomplished things in government, so I am unelectable.
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