The Matanuska-Susitna Borough has essentially completed the second phase of port development, an earth fill barge dock, and a fully integrated and operational deep-water marine port. This paper summarizes the major actions currently underway and how allocated funds, in particular federal funds, will be used to complete the next critical phases of Port MacKenzie's development. Additionally, the paper provides a brief description of private sector entities that have expressed interest in utilizing the port complex.

Parties expressing interest in utilizing the port have dramatically risen over the past year. As a result, client development activities are rapidly progressing on a number of fronts. The Borough continues to support Alaska Manufacturing Contractors’ (AMC) construction of modular homes for the Department of Housing and Urban Development (HUD). These homes are destined for rural Alaska communities. Since the summer of 2001, 68 homes have been shipped from Port MacKenzie to rural communities in Alaska. The unique aspect of the construction of these homes is that residents from the communities that the homes are destined are afforded the opportunity to help construct their homes. This provides training in the building trades at Port MacKenzie for rural residents thereby improving their chances of obtaining gainful employment. VECO has presented the Borough with a Letter of Interest to construct the firm's oil/gas field modular units at Port MacKenzie. The Port MacKenzie facility offers several highly significant means of improving VECO's competitive standing in modular construction thus providing additional employment opportunities for qualified Alaskans. The Borough is working closely with VECO to identify those capital improvements that are necessary to meet its needs. NPI, a wood chip company, has already executed a lease agreement with the Borough for the facility and constructed a new 1.25 mile access road, 18 acre pad, and 3,000’ conveyor system to the new deep-draft dock.

The Borough is also discussing a variety of cooperative efforts with other partners who own land in the Port District and adjacent areas to actively market and develop the marine port and industrial complex. The primary partners include Cook Inlet Region Incorporated (CIRI) and the University of Alaska. These two organizations understand the economic benefits that will accrue to their organizations from Port MacKenzie. Other nearby private landowners will also benefit from the port's development.
Without the availability of federal funds obtained through the offices of Congressman Young, which allowed Phase I to be built, and Senator Stevens who has provided the funds to move beyond Phase I, primarily through the Federal Transit Administration (FTA), the Port MacKenzie project would still remain a dream. Senator Lyda Green has also been instrumental in obtaining a $10 million grant from the State of Alaska for the construction of the deep-draft dock. The Borough voters approved Proposition 9, in October 2003, which enabled this project to be substantially completed in 2004. The Borough has moved forward with Phase II of the project, which has been funded by FTA funds obtained by Senator Stevens and State funds obtained by Senator Green. Phase II consists of bringing electrical power, telephone service, vibro-compacting the dock's fill, reducing the grade of the access road, completing the environmental assessment and preliminary engineering and design of the ferry landings and ferry, and extending the dock to deep water. Completing these projects, through the use of FTA funds, is critical to the viability of the Port MacKenzie marine port and industrial complex and to the existing firms located at the port as well as the opportunities being pursued by the Borough. The Borough is making steady progress with these FTA on the use of the funds.

Senator Stevens has most recently provided the Borough with an additional allocation of $4.4 million in FTA and $6 million in FHWA funds. These funds are critical to the port's continued development. More specifically, these funds will be used to improve the transportation links between the port site and the existing labor and commercial areas that are more than an hour's travel from the port site. For example, the last 14 miles of the Point MacKenzie Road is still a gravel surface, creating higher road and vehicle maintenance costs and longer travel times. While the road is scheduled for paving it will not occur for a few years. The $4.4 million in FTA funds allocated by Senator Stevens will be used to establish transit support for the businesses located at Port MacKenzie. It is envisioned that multi-modal facilities, to specifically include public transit, will be constructed at the port, appropriate transit vehicles purchased, and other transit investments made to ensure that the cost of doing business at Port MacKenzie is price competitive. The FHWA funds will be used to improve the Point MacKenzie Road and construct a public boat launch at the Port.

Associated capital projects are also taking place that compliment the federal FTA investments. A rail location study has been completed which identifies the specific corridor for a branch line from the Alaska main line in Willow to Port MacKenzie. Additionally, a master planning effort is underway to identify how the port lands should be subdivided and parcels allocated (by industry/use). The Port District has recently been expanded to 8,940 acres (14 sq. miles) in order to provide adequate and market competitive office, commercial and work camp lands. Lastly, the Borough recently received a report prepared by The Cornell Group, an internationally recognized port and transportation development firm, that describes a "road map" for the port's continued development. The Borough has taken the report under advisement and will implement the key components.

In conclusion, the Port MacKenzie marine port and industrial complex remains the Borough's key economic development project. The Borough continues to work with business firms located at the port in their efforts to expand and is working to locate additional firms, such as VECO, at the port. Efforts are also underway to implement the Phase II efforts that will make the facility economically competitive throughout the regional and world markets. Funding provided by Senator Stevens, Congressman Young, and Senator Green are the primary reasons this opportunity is becoming a reality. The new funding allocations are critical to the port's continued development and will be immediately utilized. The Borough is working with other major landowners in the port district, specifically CIRI and the University of Alaska, to broaden marketing and development efforts. Additional commodities such as sand, gravel, and coal will soon come on line as new exports from Port MacKenzie. Many new jobs have been created as a direct result of Port MacKenzie and these job opportunities will continue to expand as the Port develops. The businesses located at the Port will contribute significantly to economic development throughout the Matanuska-Susitna Borough and will provide alternative revenue to the Borough’s General Fund.