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Economic Development

Economic Development

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Published by api-3737828
A 4-page excerpt from a proposal which gives a brief overview of the client, an Alaska Native Tribe, and the project, a foam panel manufacturing plant.
A 4-page excerpt from a proposal which gives a brief overview of the client, an Alaska Native Tribe, and the project, a foam panel manufacturing plant.

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Published by: api-3737828 on Oct 18, 2008
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Sativa Quinn Writing Sample
Economic Development Project \u2013 Page 1
a) Kotzebue and the Northwest Arctic Borough

Kotzebue is in dire need of more housing and more jobs. The catch is, now we
have the opportunity for people to get good home loans through our HUD
programs, but the population has been growing steadily and there hasn\u2019t been
a new house built in Kotzebue in the last 3 years. A good interest rate isn\u2019t
going to do any good if there\u2019s no new houses to buy and no jobs to help our
people pay back those loans. -Walter Porter, Director, Tupiq Services, Inc., a

housing services subsidiary of Kotzebue IRA

The Kotzebue IRA represents the Native people of Kotzebue, Alaska, a small city of
almost 3,000 people, 75% of whom are Alaska Native. The vast majority of Kotzebue\u2019s
Native population are Inupiat Eskimos, and are direct descendants of the people who
have resided in the region since time immemorial.

The Northwest Arctic Borough

Kotzebue serves as a hub community for
ten outlying villages which are closely
linked to the city by cultural, familial and
economic ties: Ambler, Buckland, Deering,
Kiana, Kivalina, Kobuk, Noatak, Noorvik,
Selawik and Shungnak. These eleven
communities are represented collectively
by the Northwest Arctic Borough at the
state level, and their Native populations are
represented collectively by the Northwest
Arctic Native Association, a for-profit

corporation commonly known as NANA. All of these communities are primarily Inupiat
and they are united by their strong commitment to the Inupiat language, culture and
values. Subsistence activities such as hunting, fishing and berry picking are important in
all of these communities, and traditional dance is performed and enjoyed by young and
old alike in every village.

As of 1990, the Northwest Arctic Borough had both the highest percentage of Alaska
Natives in the population of any region in the state, at 85.2 percent, and one of the highest
unemployment rates of any region in the state, at 20.3 percent. Employment
opportunities in the region have improved somewhat over the past 10 years due to the
opening of the Red Dog Mine, the world\u2019s largest zinc mine. However today, the
Northwest Arctic Borough still has an average annual unemployment rate of 16.1 percent,
more than twice Alaska's annual average of 7.9 percent.1 This does not count the high
proportion of discouraged workers who no longer apply for jobs.

1 \u201cA Profile: The Northwest Arctic Borough\u201d in Alaska Economic Trends, January 1999. Alaska
Department of Labor.
Sativa Quinn Writing Sample
Economic Development Project \u2013 Page 2

In Kotzebue, 12.7 percent of the population lives at or below the poverty level, and
poverty levels in the outlying villages range as high as 30 percent. As of January, 2000,
317 individuals in Kotzebue were receiving some form of public assistance according to
the Alaska Department of Health and Social Services.

In recent years, as economic conditions have gradually improved and more tribal
members have completed higher education degrees, the people of the region have begun
to focus on achieving greater self-determination in all areas of social and economic
development. As part of this effort, the Kotzebue IRA applied for and received funding
through the Department of Housing and Urban Development\u2019s new Native American
Housing and Self-Determination Act (NAHASDA) to address Kotzebue\u2019s housing
shortage. These funds were used to improve sub-standard housing and to plan activities
that would address the tribe\u2019s existing and future housing needs. The concept for the
Nunavik Manufacturing Plant grew out of this process.

b)The Nunavik Manufacturing Plant: Overview of Benefits

The plant will use Expanded Polystyrene Foam (EPS) to produce insulation products for
civil, residential and commercial use. Examples of the various applications for this
product include building homes with Structural Insulated Panels (SIP) composed of EPS
sandwiched between layers of wood; using the insulation in renovation and
weatherization projects on existing homes; and using the insulation to protect roadways,
airstrips and utility pipes from weather conditions and permafrost. All of these
applications have already been used in the Kotzebue area on various development
projects over the past few years. EPS products have proved to be a great success in terms
of standing up to arctic conditions, producing structures that look the same as any other
on the outside, but are more resistant to both wind and moisture than stick-built buildings.
Developers in the area say they would use EPS and SIP products more frequently if not
for the high cost of \u201cshipping air\u201d by paying the freight costs for bringing the lightweight
but bulky foam panels to Kotzebue by barge or plane.

The plant will help to address unemployment in Kotzebue and the surrounding region in
three ways:
In Kotzebue, Nunavik will create 13 new permanent jobs during the first year of
operations, with more new jobs anticipated in future years.

Kotzebue IRA will provide paid training in the use of EPS and SIP products for
construction to Alaska Natives in Kotzebue as well as to Natives from any other
villages of the Northwest Arctic Borough where Nunavik products are being used.
Numerous large-scale construction projects are planned throughout the region
over the next 10 years, so Nunavik will be a source of both local materials and
local labor, creating several seasonal jobs each year and helping to keep more of
the money spent on housing and infrastructure in the region.

Nunavik will make it possible for the Kotzebue IRA to create more middle
income and low income housing in Kotzebue. This housing will make it possible
Sativa Quinn Writing Sample
Economic Development Project \u2013 Page 3
for Inupiat from the villages who wish to find employment reasonably close to
home to take some of the available jobs in Kotzebue.

In addition, Nunavik will help residents of the region stretch their incomes further by
minimizing some of the factors which give the Northwest Arctic Borough an
exceptionally high cost of living, such as:

Shipping: Shipping costs greatly increase the cost of a new home in the arctic.

In the case of stick-built homes, all materials must be imported since Kotzebue
has no trees. In the case of existing EPS structures, builders had to pay for
\u201cshipping air\u201d because the polystyrene was expandedb e f o re it was sent to
Kotzebue. By importing condensed polystyrene beads and expanding themin
Kotzebue, the plant will reduce shipping costs, and ultimately, reduce the costs of
a new home by as much as 20 percent.

Fuel: Most homes in the region rely on oil for heating, which currently costs

$3.00/gallon. EPS homes are more fuel efficient than stick-built homes by a
minimum of 15 percent, and using EPS to weatherize existing homes can improve
their fuel efficiency by as much as 50 percent, saving families as much as

Outside labor: Working on stick-built homes typically requires years of training

as an apprentice. The training process to participate in SIP construction projects
will take 3 weeks and will be available in Kotzebue. This means that the ultimate
cost to the home-buyer will not include the costs of transporting workers from
elsewhere. Training costs for local workers will be supported through grant funds
or contributions by local organizations.

Rental rates: The housing shortage has led to exorbitantly high rental rates in

Kotzebue. The creation of more new housing will also bring rental costs down
over time, reducing one of the largest areas of expense for lower-income

By linking the creation of employment and the creation of housing, Nunavik will literally make room for economic development in Kotzebue to occur. Nunavik will serve as one of the few rural Alaska development projects designed to supply local needs and keep local dollars in circulation, rather than seeking to sell natural resources to national or international markets. Nunavik\u2019s own employees will be among its earliest clients and will also serve as some of its best advertising.

Kotzebue IRA will accomplish these goals through a public-private partnership, relying
on local organizations as partners in order to keep the profits within the Northwest Arctic
Borough. So far, Kikiktagruk Inupiat Corporation (KIC), which represents the Native
people of Kotzebue as shareholders, has made a $750,000 contribution and will share in
profits from the plant. KIRA is also negotiating with NANA, the for-profit regional
corporation representing the Native population of all eleven communities, to be a partner
in the project through a contribution of cash or in-kind. NANA is currently completing a
due diligence process prior to investing in Nunavik, but has indicated an interest in
investing as a 25 percent equity partner (See Letters of Support \u2013 Appendix 8).

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