OceansAlaska Requests Financial AssisanceBy MARY KAUFFMAN
June 19, 2013
An ordinance to amend the FY 2014 Ketchikan Borough Budget was introduced at the Borough Assembly meeting Monday evening. The ordinance, if approved by the Ketchikan Borough Assembly, would appropriate $338,000 from the Economic Development Fund as a Grant to OceansAlaska and would direct the Borough Manager to seek $2,400,000 in State and/or Federal Funding for the construction of a 10,000-square foot hatchery to be owned and operated by OceansAlaska. According to information presented to the Ketchikan Borough Assembly in its written request for financial support, the seed that leaves the hatchery this year will result in local farm sales $2.5 to $5 million (wholesale value.) Representing the nonprofit organization OceansAlaska at Monday night's meeting, Tom Henderson asked the Ketchikan Assembly for their support in funding OceansAlaska for the next two years. Henderson said, "This is your opportunity to make a real impact in the future of this area." Henderson said he's seen the rise and fall of industries in the area such as timber and fishing. He said, "Mariculture is one industry that has provided great stability in many parts of the world at our latitude." This is an opportunity to get our foot in the door in Ketchikan and Ketchikan will be the center of the mariculture in Alaska he said. There is an industry need said Henderson. Oyster farmers in Alaska are starved for seed. Traditional suppliers in Oregon and Washington are facing conditions - ocean acidification, pollution, and political obstacles - that have reduced their ability to produce large volumes of seed, while these same growers want to increase their own production and are not able to meet their internal needs. Independent oyster farmers of the Pacific Northwest and Alaska can no longer expect to receive enough seed to sustain shellfish operations from their traditional suppliers. In 2011 growers received up to 50% of the seed that they ordered. Last year Alaskan farmers There are questions as to why OceansAlaska is asking for money said Henderson. "It always takes a lot of public support to get going," said Henderson. It takes a lot of money, a lot of work and a lot of losses to get the industry started he said. Oceans Alaska stated that it is currently supplying seed to oyster and geoduck growers in Alaska at a loss and a larger facility would be more efficient and be able to cover its own costs without any government subsidy. Gary Freitag, who is on the Board with OceansAlaska, also spoke in favor of the borough grant and has been a part of the program since it was first envisioned as an aquarium. Freitag, President of OceansAlaska, told the assembly that part of the original intent was a scientific mission to help mariculture develop also. Freitag said when the crisis came about where OceansAlaska realized they were the only game in town that can actually produce seed and could actually do anything that can seriously help this industry move forward, the asked what is the constraint that is holding that industry back. Freitag said OceansAlaska then decided about four years ago to move forward on trying to develop a mariculture type component which can help the mariculture industry expand. Freitag said they see that as helping all of Southeast Alaska. OceansAlaska presented a written plan to the Ketchikan Assembly for building a shellfish mariculture industry that they say will equal or exceed the value of the salmon industry. OceansAlaska's current modified facility has the capacity to produce 5-10 million oysters and 50-100,000 geoducks. According to the report presented to the Assembly, revenues from sales of seed at this volume are insufficient to support OceansAlaska's hatchery operations or meet the demands of local growers. For 2013-2014, OceansAlaska plans to continue operation of the floating facility in Wards Cove Ordinance No. 1677 to amend the FY 2014 Ketchikan Borough Budget is requesting the Assembly to direct the Ketchikan Borough Manager to seek $2,400,000 in State and/or Federal Funding for the construction of a 10,000-square foot hatchery to be owned and operated by OceansAlaska. The plan is to build a shore-based hatchery that would supply 50 million oyster and 3 million geoduck seed when it is fully operational in three years. Hatchery sales would be sufficient to cover operational costs once full production is reached. Oceans Alaska’s Southeast Alaska Mariculture Industry Initiative’s (SAMII) focus is on the development of a viable, sustainable shellfish industry in Southeast Alaska. SAMII’s 10,000 square foot hatchery will be located on OceansAlaska's site at mile 8.9 South Tongass. The facility is estimated to cost a total of $3.1 million. $700,000 has already been invested in site development and completion of the project would require $2.4 million in additional funds. $50,000 is necessary to prepare the schematic design for a shore based hatchery that will then be used to secure grant funding for the construction of the hatchery from state and federal sources. The land-based facility will initially be focused on supporting the oyster and geoduck industries. Once full production is reached in these areas, work could begin on cucumbers, abalone or other shellfish as demand dictated. The smaller floating facility could either return to its original use as a research and training facility or it could be utilized as a startup for another hatchery site. The motion to introduce Ordinance No. 1677, Amending the FY 2014 Budget by Making Supplemental Appropriations in the Amount of $338,000 from the Economic Development Fund as a Grant to OceansAlaska, passed with Ketchikan Assembly Member Todd Phillips voting no. The ordinance is now scheduled for a public hearing on July 1, 2013. The portion requested from the Ketchikan Borough totals $288,000 over two years plus an additional $50,000 for the schematic design, for a grand total of $338,000 to be appropriated.
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