In recent years, Alaska’s Native village corporations have been making big economic waves in the state. In fiscal year 2016, 22 percent of the total revenue generated by Alaska-based businesses came from village corporations, about $2.7 billion.
Add in the revenue from Alaska Native regional corporations, and the number grows to more than 70 percent of the $14.8 billion in revenue from Alaska-owned business.
The corporations were created under the 1971 Alaska Native Claims Settlement Act (ANCSA), which granted Alaska Natives title to 44 million acres of land and $962.5 million to clear land claims. Under ANCSA, 12 Alaska-based regional corporations and more than 200 village corporations were created, with the dual mandate to make money and provide for the educational, social, and cultural well-being of the shareholders. A thirteenth corporation was later set up for Alaska Natives living outside the state, but it did not receive a land distribution and was dissolved in 2013.
Youth at a Dig Afognak bonfire.
When regional corporations develop resources such as timber or oil and gas or zinc, they have to share those resource revenues with the villages through the 7(i) and 7(j) clauses of ANCSA, Bissett says.
The 7(i) clause requires regional corporations to annually redistribute 70 percent of net revenues from resource development among all twelve Alaska-based regional corporations. Clause 7(j) requires the regional corporations to redistribute half of those payments to village corporations and at-large members.
The study (by the McDowell Group for ANCSA Regional Association) notes that between fiscal year 1982 and fiscal year 2015, approximately $3.1 billion (adjusted for inflation) has been distributed to all Alaska Native corporations under 7(i). About half of that amount was distributed to village corporations under 7(j). The overall amount has generally increased over time and totaled $234.5 million in fiscal year 2015. For many of the smallest corporations, the infusion of 7(j) revenues was a major part of their budget.
Although some village corporations focus on local activities such as the power systems and tribal duties, others have waded into the corporate world. And while the regional corporations have traditionally been the powerhouses, village corporations are increasingly right alongside them.
In fiscal year 2016, three village corporations were among the ten largest Alaska-based corporations: Chenega Corporation reported revenues of $927 million, Afognak tallied $474.3 million, and Ukpeaġvik Iñupiat Corporation reported revenues of $424.3 million.
Chenega Corporation has had great success in government contracting but has been working to diversity its portfolio and now owns the majority of the electrical contractors in the state, Bissett says. Its government services arm operates in multiple business lines with several companies in each.
Shareholder Susie Malutin leads a cultural workshop with youth at Dig Afognak.
“Quite a few of the larger village corporations have significant investments in government contracting, which is true of the regional corporations, as well,” Bissett says. “Village corporations such as Chenega and Afognak started out in government contracting, but in recent years have been working to diversify their revenue streams.
Each corporation interpreted its mandate to benefit shareholders in its own way. The Eyak Corporation (TEC) is the village corporation for Cordova, one of five villages in the Chugach region. Although the bulk of TEC’s operations are in government services, it is also looking at how it can directly improve life for its shareholders.
In 2011, TEC acquired an ownership interest in Native American Bank, which serves Alaska Native corporations, tribes, and Native enterprises as well as Native individuals. It recently invested in Baxter Senior Living, which is building an assisted living center in Anchorage. The investment allows TEC to help create badly needed housing for elders, as well as provide more job opportunities for shareholders. TEC is actively looking for additional investments in Alaska.
Locally, TEC supports community activities in Cordova, such as the Native Village of Eyak’s elder programs, a cemetery cleanup day, and a monument to recognize veterans.
Traditional dancers perform at the Afognak Native Corporation headquarters in Kodiak.
Alutiiq culture is the guiding principle for Afognak Corporation, says Malia Villegas, vice president of corporate affairs.
The corporation includes the Kodiak Alutiiq people of Afognak and Port Lions and it represents nearly 1,000 shareholders. Its early operations focused on timber and land management, which it invested successfully into the government services fields.
Today Afognak, its wholly-owned subsidiary Alutiiq, and their subsidiaries have about 5,000 employees in nearly every state and around the world. They provide government services in a variety of fields, including a commercial leasing division with facilities on the North Slope. Another contract includes Job Corps, with “a pretty extensive youth services footprint,” Villegas says.
In addition to business operations, corporations such as Afognak host a variety of community programs. This summer, Afognak will host its third annual Afognak Youth Charity Golf Tournament at the Anchorage Golf Course. Proceeds directly benefit the tribal youth education programs operated by the Native Village of Afognak and the Native Village of Port Lions. Those include Dig Afognak Camp, an Alutiiq cultural camp for youth that has operated since 1998; preschool and afterschool activities; Alutiiq language lessons; and Alutiiq Cultural Activities. The corporation also works closely with its sister tribes in Afognak and Port Lions and helps sponsor a series of camps focused on subsistence, Alutiiq culture, and languages.
The corporation also still maintains a timber business. Villegas notes one of the nearby bays is named after her grandmother.
As the largest private land owner in southcentral Alaska, Eklutna owns 90,000 acres within the Municipality of Anchorage and has extensive holdings in the Matanuska-Susitna Valley—prime real estate in an increasingly crowded metropolitan area. In 2016 Eklutna Construction and Maintenance won the contract to dismantle the obsolete eighty-foot Eklutna Dam, which was built in the 1920s, and the process of restoring the river is underway. The wholly-owned subsidiary also worked on an upgrade to the FBI offices in Anchorage and renovated a swimming pool at Fort Wainwright’s Melaven Fitness Center. It is also building a substance abuse recovery facility for Cook Inlet Tribal Council. The center, which will have sixteen beds, offices for twelve personnel, a commercial kitchen, dining area, group room, and carving studio, is expected to be complete in December 2018.
The Kuskokwim Corporation (TKC) was created in 1977 when ten smaller village corporations along the middle part of the Kuskokwim River merged. It owns more than 950,000 acres of surface estate in western Alaska, which includes what may become one of the largest gold mines in the world: Donlin Gold.
The mine, with provable and probable reserves estimated at 33.9 million ounces of gold, is owned by subsidiaries of Novagold and Barrick Corporation. Calista Regional Corporation owns the subsurface estate. It is a region with few jobs, but that is expected to change.
The mine is expected to be a huge economic driver for the region, on par with Red Dog zinc mine’s impact on Northwest Alaska. As many as 3,000 jobs are expected during construction and the mine would create about 1,400 jobs for the duration of its planned twenty-seven-year life. So far, about 90 percent of the jobs created during the early phases have been local hire, and Donlin says it’s committed to hiring residents from the region. The mine has worked closely with residents, providing information and presentations in both English and Yup’ik.
TKC has partnered with Donlin to form a private foundation to support expanded educational and vocational training for shareholders interested in the mining industry. In addition, TKC has been working closely with the Kuspuk School District, EXCEL Alaska, and the Association of Village Presidents to connect shareholders with educational programs. In addition, Calista would generate royalties from the gold, 70 percent of which would be distributed to other Native corporations statewide.
Working in government contracting has connected village corporations with organizations and people around the world. One of Sitnasuak’s subsidiaries, SNC Technical Services (SNCT), is based in Puerto Rico. The island was pummeled by hurricanes Irma and Maria, with major destruction to its infrastructure and electrical grid.
SNCT’s facilities, which employ about 700 people who manufacture uniforms and tactical gear for the US military, were largely spared from the damage, so Sitnasuak set up leadership teams to help with the larger problem of restoring electricity. It offered subsidized lunches to employees and onsite daycare for their children.
In addition, Sitnasuak sent satellite phones, generators, fuel, camp stoves, water purification systems, and ice makers. According to the newsletter, ice was in especially high demand and SNCT distributed as much as it could from its own machines. Nearly 300 employees’ homes were damaged and some were totaled.
The company was one of the few to start manufacturing clothing again soon after the storms, so employees were spared being out of work for weeks.
“We tried to maintain some sense of normalcy and community by providing meals, supplies, and secure jobs,” says Humberto Zacapa, CEO of SNTC.
SNCT shares that attitude of caring with its parent company.
Bissett says the village corporations are just starting to hit their stride. “The interesting thing for me about village corporations is they recapitalize every single year,” Bissett says. That creates opportunity for future leaders in the Native community who have gone to Ivy League schools and have a business background to come and lead these organizations.
“They’ve been in business now for fifty years, a typical time for a normal entrepreneur or business person to really learn the ropes.
Kymberlee Blondin, an Afognak/Alutiiq descendant, dances.
This is an updated version of the original June 19th posting. It has been corrected to show Calista Regional Corporation owns the subsurface estate.
Julie Stricker is a journalist living near Fairbanks.