city and borough of juneau population forecast

SECOND CROSSING DEIS

CITY AND BOROUGH OF JUNEAU

POPULATION FORECAST

PREPARED FOR:

HDR Alaska, Inc.

December 2003

SECOND CROSSING DEIS

CITY AND BOROUGH OF JUNEAU

POPULATION FORECAST

PREPARED FOR:HDR Alaska, Inc.

PREPARED BY:

Juneau • Anchorage

December 2003

i

TABLE OF CONTENTS

Table of Contents.............................................................................................................................i

Executive Summary ........................................................................................................................1

Introduction.....................................................................................................................................5

Purpose and Scope .......................................................................................................................5

Methodology..................................................................................................................................5

Limitations .....................................................................................................................................6

Chapter 1. Historical Population Growth in Juneau ......................................................................7

Past Growth Trends.......................................................................................................................7

Overview of Past Economic and Demographic Trends ...................................................................9

Chapter 2. Review of Other Local and Statewide Population Forecasts ....................................10

State of Alaska, Department of Labor and Workforce Development..............................................10

U.S. Census Bureau ....................................................................................................................11

Transportation Planning Related Forecasts..................................................................................12

Chapter 3. Basic Industry Conditions and Outlook .....................................................................13

Chapter 4. 30-Year CBJ Population Forecast...............................................................................17

Chapter 5. Role of West Douglas in Juneau’s Population Growth..............................................20

CBJ Land Management Plan .......................................................................................................20

CBJ Comprehensive Plan ............................................................................................................21

CBJ and Goldbelt West Douglas Conceptual Plan........................................................................22

West Douglas Market Assessment...............................................................................................24

Other West Douglas Development Considerations .......................................................................25

Summary Analysis .......................................................................................................................25

Bridge Location Considerations....................................................................................................27

CBJ Population Forecast McDowell Group, Inc. • Page 1

EXECUTIVE SUMMARY

The purpose of this study is to predict long-term population growth in Juneauthrough the year 2035 and to assess the role of improved access to West Douglas inJuneau’s long-term development. The study includes analysis of historicalpopulation growth in Juneau, existing population forecasts, basic industry trends inJuneau, and a review of West Douglas-related planning documentation.

Historical Population and Demographic Trends

• Over the past 30 years, Juneau’s population has grown at an average annualrate of about 2.4 percent, with population climbing from about 15,200 to31,000 residents.

• From a long-term perspective, Juneau’s rate of population growth has beenslowing. Population growth over the past 20 years has averaged 1.4 percentannually, compared to 0.9 percent over the past 10 years. Over the past fiveyears, Juneau has grown at an annual rate of 0.8 percent.

• Demographic trends affecting Juneau’s population include a decline in theaverage household size over the past 20 years. In 1980, the averagehousehold size in Juneau was 2.74 persons. In 1990 the average was 2.66 andin 2000 the average declined further to 2.60 persons per household.

• Between 1990 and 2000 the average age of Juneau residents increased from31.7 years to 35.3 years. Birth rates declined from about 20 births perthousand residents in the 1980s to about 13 births per thousand in 1999.These local trends generally match statewide trends.

Other Population Forecasts

• The Alaska Department of Labor and Workforce Development (DOLWD)Juneau area population forecasts include growth rates ranging from 0.4percent annually in the low case to about 1.0 percent in the high case,through 2018. At these rates Juneau population would be between 33,000residents and 37,000 residents, with a middle case of about 34,500 in 2018.

• Alaska’s overall growth rate is predicted to be somewhat higher thanJuneau’s, at between 0.7 percent and 1.5 percent over the 1998 to 2018 period.

• Statewide population trends are important to Juneau because of thecommunity’s role as state capital. To a degree, the number of workersemployed in state government in Juneau depends on statewide demand forgovernment services. Increasing population means increased demand forservices.

• The US Census Bureau population forecast for Alaska indicates an averageannual growth rate of about 1.1 percent.


Economic Trends in Juneau

• A variety of forces will shape economic development in Juneau over the next30 years, some predictable, others unforeseeable. State government, Juneaulargest employer, will continue to struggle with budget deficits and anuncertain revenue picture.

• According to Department of Revenue forecasts, Alaska North Slope (ANS) oilrevenue is expected to continue declining through at least 2010.

• Other forces that will or could affect state government in Juneau includepopulation growth elsewhere in Alaska (affecting the demand for stategovernment services), potential development of ANWR and a gas pipeline,and world oil prices. This analysis assumes that Juneau retains its role asAlaska’s capital.

• Tourism is likely to continue to be the only real growth industry in Juneau.Cruise ship traffic is expected to continue growing, with passenger trafficperhaps reaching 1.2 to 1.5 million within 10 years, according to one estimate.

• Mining industry activity will affect Juneau’s economy and population, withthe Greens Creek mine likely closing during the forecast period, and theKensington Mine opening and closing within the next 30 years.

• Other components of Juneau’s economy, including federal government, theseafood industry, and others should be relatively stable with some prospectfor growth.

• Over the long-term, employment is expected to grow slowly in Juneau, atbetween 1.0 and 1.5 percent annually. Over the past ten years, employment inJuneau has grown at an annual rate of 1.8 percent, and over the past 20 years,2.1 percent. Over the past five years, employment growth has slowed toabout 1.2 percent annually.

30-Year Population Forecast for Juneau

Based on an analysis of recent population and demographic trends in Juneau, and anassessment of local basic industry conditions, the study team prepared low, middleand high case population forecasts for Juneau.

• The low case population projection shows very slow growth for the Juneauarea: 0.5 percent annual growth over the 30-year forecast period. This rate ofgrowth would push Juneau’s population to about 37,500 residents

• The medium case population projection for Juneau is for a 1 percent annualgrowth rate, lifting the local population to about 42,800 residents by 2035.This represents approximately 12,000 new residents.

• The high case population projection places Juneau’s population at 50,500residents in about 30 years. This is almost 20,000 new residents over theforecast period and represents an annual growth rate of 1.5 percent. This isslightly above Juneau’s historical 20-year growth rate of a 1.4 percent.


West Douglas Area Background

• The West Douglas planning area is located on the northwest side of DouglasIsland beyond the present end of North Douglas Highway. It extends as abelt about 1 mile wide and 8.5 miles long along the west shore of the island.Most of the area is on a bench bounded on the west by Stephens Passage andon the east by the high mountain ridges of Douglas Island.

• Goldbelt, Inc.’s property covers 1,740 acres along the shoreline, from OuterPoint to approximately one mile south of Point Hilda. The width of theproperty averages between 1/4 and 1/2 mile. CBJ land covers 3,434 acresimmediately inland of the Goldbelt property and is also relatively narrow(average 1/2 mile). Immediately upland is undeveloped US Forest Serviceland.

• Goldbelt is interested in West Douglas uses that “simultaneously protect theenvironmental qualities of the land, provide for continued shareholderrecreation opportunities, and develop revenue.”1 The CBJ objective is to usethe West Douglas area to satisfy community needs for housing, recreationalopportunities, and commercial infrastructure.

Role of West Douglas in Juneau’s Growth

The role of improved access to North and West Douglas in the long-term growth ofJuneau is a critical point in considering the benefits of a second crossing. Keybackground information and study findings include the following:

• Approximately 60 percent of the property on the CBJ’s long-term landdisposal list is on Douglas Island in areas that would directly impact the needfor and usage of a second crossing.

• The City and Borough of Juneau Comprehensive Plan states that three of themost likely sites for new growth are west, south and north Douglas Island.In the Comprehensive Plan, the West Douglas area is designated as a “NewGrowth Area.”

• Based on the population forecasts made in this study, Juneau’s populationcould grow by between 6,500 and 20,000 new residents over the next 30years. This translates into a need for between 2,500 (in the low case) and 7,700(in the high case) additional housing units.

• With the community’s available capacity for between 2,500 to 4,000additional housing units, Juneau appears to have adequate space to meetfuture housing needs in the low case growth scenario. However, Juneau willcontinue to struggle with high housing costs resulting from high sitedevelopment costs. Relatively high density development of the WestMendenhall area would be required, in the absence of significant DouglasIsland growth.

1 Minch Ritter Voelckers, West Douglas Conceptual Plan. Prepared for the City and Borough of Juneau andGoldbelt, Inc., May 1997.


• In the middle case population forecast, an additional 4,500 housing unitswould be needed over the next 30 years. This is more than the availablecapacity of between 2,500 and 4,000 units. Growth in the absence of a secondcrossing would result in in-filling of almost all available land and likelyhigher densities than current levels.

• The high case population forecast would result in demand for an additional7,700 housing units, almost double what is available from Juneau’s existingtransportation and utility infrastructure, plus development of the WestMendenhall area. This suggests that development of Douglas Island acreagewill be required to meet the community’s long-term needs.

• The additional employment opportunities needed to support Juneau’spredicted population expansion would be based primarily in existingcommercial areas; Downtown, the Airport/Valley area, as well as the LemonCreek area.

• Juneau has more capacity for commercial growth within existinginfrastructure than it does for residential growth. The exception to this iswaterfront industrial/commercial property, which is limited, and whichWest Douglas access and development could provide.

• After golf course development, the types of businesses most likely to locate inthe North and West Douglas area include those related to marine supportservices, freight shipping and handling services, seafood processing, andvisitor-related services.

• As the West Douglas area develops over time (as the West Douglaspopulation and commercial activity grows), more retail and service-orientedbusiness would locate in the area.

• In summary, long-term demand for developable housing and waterfrontcommercial property, rather than general commercial development acreage,indicates the need for better access to North and West Douglas.


INTRODUCTION

Purpose and Scope

The purpose of this study is to predict long-term population growth in Juneauthrough the year 2035. An important secondary objective is to assess the role ofimproved access to West Douglas in Juneau’s long-term growth. This reportprovides supporting data for the Juneau Second Channel Crossing EnvironmentalImpact Statement, including traffic analysis and the project’s Purpose and Needanalysis.

This study provides an area-wide population forecast. Where growth occurs in thecommunity depends on many factors, including the type of economic developmentthat may spur population growth, the location of available land and utilities forresidential development, and other factors that are difficult to quantify.

The methodology used to develop a population forecast for Juneau is describedbelow.

Methodology

This report provides a population forecast, rather than a projection. A projectionsimply projects past trends into the future. A forecast considers and adjusts forcurrent and potential future circumstances that could affect population growth.

This study included five basic tasks:

• Review of historical population trends in Juneau and discussion of forcesdriving those trends

• Identification of population forecasts made by other analysts and otherforecasts used in infrastructure planning in the Juneau area

• Discussion of any foreseeable events or trends in the basic economy thatcould result in faster or slower population growth

• Preparation of low, middle and high case population growth scenarios

• Assessment of the effect, if any, of improved access to West Douglas on thetiming and/or magnitude of population growth in Juneau overall.

This study does not include the development of an economic and demographicforecast model for Juneau. It is possible to build a model based on historical datathat links economic and demographic trends with changes in population. However,such a modeling exercise is beyond the scope of this study. In any case, in the end,subjectivity and professional judgment are required in the assessment of how trendsmight shift in the future. That subjectivity often makes the more qualitative analysisjust as useful to planners and others as the much more complex and resource-intensive econometric approach.


Limitations

Population forecasts provide planners and policy makers with a reference point inwhich to gauge potential development options. Of course, the farther into the futurea forecast looks, the less reliable it is. In other words, a five-year forecast is morelikely to be accurate at the end of the forecast period than a 30-year forecast. Noresearcher can predict the events that often lead to significant changes in population.Alaska’s history is a case in point. World War II, discovery of oil on the North Slopeand subsequent pipeline construction (the most important events in Alaska’smodern history) could not have been foreseen. Nevertheless, researchers can analyzehistorical trends, consider potential trends and developments, and use professionaljudgment to arrive at population estimates that meet the needs of communityplanners and policy makers.

Because of the inherent uncertainty in any population forecast, in someinfrastructure planning efforts it is important to consider the effects of growth rateshigher or lower than predicted. Depending on how population forecasts are used,this “sensitivity analysis” can be critical in determining the most appropriateinfrastructure development. However, for this project, sensitively analysis is notwarranted.


CHAPTER 1. HISTORICAL POPULATION GROWTH IN JUNEAU

Past Growth Trends

Over the past 30 years, Juneau’s population has grown at an average annual rate ofabout 2.4 percent. Over the 1972 to 2002 period, Juneau’s population has doubled,climbing from about 15,200 to 30,981 residents. This is based on population datapublished by the Alaska Department of Labor and Workforce Development(DOLWD) and the US Census Bureau. The Census Bureau conducts a census everyten years, including an actual count of residents. DOLWD population figures areestimates based on demographic trends and other data, such as Permanent FundDividend applications.

Figure 1Juneau Population, 1970-2002

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5,000

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30,000

35,000

1970

1971

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2002

1970 Population of 13,556

2002 Population of 30,981

The 30-year growth rate of 2.4 percent masks significant variability in year-to-yearpopulation change in Juneau. Annual population change has ranged from a high of+13 percent between 1981 and 1982 to a low of –3.2 percent between 1986 and 1987.In terms of number of residents, the most growth in a single year occurred in 1982when Juneau’s population increased by nearly 2,700 residents. The largest singleyear decline occurred in 1987, when Juneau’s population declined by nearly 900residents.


Table 1City and Borough of Juneau Historical Population Trends, 1970 to 2002

Average Percentage ChangeYear Population Annual Change

PercentageChange 5-Year 10-Year 20-Year

1970 13,556 - -

1971 14,700 1,144 8.4%1972 15,200 500 3.4%1973 15,900 700 4.6%1974 16,600 700 4.4%1975 17,600 1,000 6.0% 5.3%

1976 18,600 1,000 5.7%1977 19,100 500 2.7%1978 19,400 300 1.6%1979 19,900 500 2.6%1980 19,528 (372) -1.9% 2.2% 3.8%

1981 20,494 966 4.9%1982 23,155 2,661 13.0%1983 24,985 1,830 7.9%1984 26,206 1,221 4.9%1985 27,117 911 3.5% 6.7% 4.4%

1986 27,685 568 2.1%1987 26,800 (885) -3.2%1988 26,064 (736) -2.7%1989 26,305 241 0.9%1990 26,751 446 1.7% -0.2% 3.2% 3.5%

1991 27,579 828 3.1%1992 28,253 674 2.4%1993 28,448 195 0.7%1994 28,454 6 0.0%1995 28,700 246 0.9% 1.4% 0.5% 2.5%

1996 29,230 530 1.8%1997 29,713 483 1.7%1998 30,021 308 1.0%1999 30,189 168 0.6%2000 30,711 522 1.7% 1.4% 1.4% 2.3%

2001 30,675 (36) -0.1%2002 30,981 306 1.0% 0.8% 0.9% 1.4%

Source: U.S. Census Bureau (1970, 1980, 1990 and 2000). All other years from DOLWD.

From a long-term perspective, Juneau’s rate of population growth has been slowing.Population growth over the past 20 years averaged 1.4 percent annually, and overthe past 10 years, 0.9 percent annually. Over the past five years, Juneau has grown atan annual rate of 0.8 percent.


Overview of Past Economic and Demographic Trends

Juneau’s long-term population growth during the 1970 to 2002 period is marked byseveral key events. These events typify the unpredictable nature of populationgrowth in Alaska. The rapid increase in population in the early 1980s had its roots inthe discovery of oil on the North Slope and subsequent construction of the Trans-Alaska Pipeline. The revenues generated by North Slope oil production addedbillions of dollars to State coffers. State government employment in Juneauincreased from about 3,000 jobs in 1975 to 4,500 jobs in 1985. A residentialconstruction boom occurred in the early 1980s, rising from 300 housing unitsconstructed in 1980 to a peak of 900 units constructed in 1983.2 (To place this inperspective, between 100 and 150 housing units have been constructed in Juneau ineach of the last five years.) A commercial construction boom occurred at about thesame time, adding thousands of square feet of retail and office space to Juneau’sinventory. During a three-year period (1982-84) of rapid economic expansion,Juneau’s population increased by 5,700 residents, an increase of over 25 percent.

The next significant event in Juneau’s population trend was the recession of 1986-87.Oil prices dropped to below $10 a barrel, and the resulting precipitous drop in staterevenue lead to a decline in state government employment of about 500 jobs, morethan 10 percent of the state workforce in Juneau. At the same time, over-expansionin housing and commercial space resulted in the loss of about 350 construction jobs,half of the local construction labor force. Overall, between 1985 and 1987, Juneau lost1,100 jobs, 8 percent of total employment. As a result, Juneau’s population declinedby about 1,600 residents, or 6 percent.

Since the 1986-87 recession, Juneau’s economy and population have been growingslowly. State government employment has returned to its pre-recession levels(though state wages and purchasing power have declined in terms of real dollars).Most of the growth has been in the retail and service sectors – with that growthdriven in part by tourism.

Since 1990, non-agricultural wage and salary employment (which includes allemployment except uniformed military and the self-employed, such as commercialfishermen) has increased by 3,400 jobs, about 25 percent. Over the same period,Juneau’s population has increased by 4,200 residents, a 16 percent increase. In otherwords, population growth has not kept pace with employment growth.

Between 1990 and the present, Juneau’s “participation rate” has increased fromapproximately 52 percent to 56 percent, meaning that the number of jobs in theeconomy is equal to about 56 percent of the total population. This suggests that agreater percentage of the population is employed than in the past. Contributing tothis trend are declining real wages (forcing households to find additional orsupplemental employment and income opportunities) and the increase in thenumber of part-time employment opportunities. This trend is likely to continue inthe near-term.

Other noteworthy trends include the decline in average household size. In 1980, theaverage household size in Juneau was 2.74 persons. In 1990 the average was 2.66and in 2000 the average declined further to 2.60 persons per household. Between1990 and 2000 the average age of Juneau residents increased from 31.7 years to 35.3years. Birth rates declined from about 20 births per thousand residents in the 1980sto about 13 births per thousand in 1999.3

2 Juneau Trends, December 1993, City and Borough of Juneau, prepared by McDowell Group, Inc.3 Alaska Population Overview, 1999 Estimates. Alaska Department of Labor.


CHAPTER 2. REVIEW OF OTHER LOCAL AND

STATEWIDE POPULATION FORECASTS

Following is a brief review of the population projections for Juneau and the stateoverall produced by the State of Alaska Department of Labor and WorkforceDevelopment (DOLWD), the City and Borough of Juneau, and the U.S. CensusBureau.

State of Alaska, Department of Labor and Workforce Development

The most recent local-area population projections prepared by the State of Alaskawere published in 1998 with a forecast period to 2018. Population projectionsprepared by DOLWD are based on an analysis of demographic trends (rather thaneconomic trends).4 The projections are based on trends in birth rates, death rates andmigration. Migration includes in-migration and out-migration. DOLWD projectionsinclude low, middle and high cases, with the middle case the most likely. From ademographic perspective, according to DOLWD, marriage and fertility behavior andbirth rates have had (and will continue to have) the greatest impact on populationgrowth in Alaska. Birth rates have been declining in Alaska over the past decade,but are expected to increase slowly over the long term.

The DOLWD analysis reports that except for a few instances (WWII and pipelineconstruction) migration has had relatively little effect on population change inAlaska. DOLWD also notes that the influence of migration on Alaska’s populationwill gradually decline as the state’s population grows.

Important long-term trends noted in the DOLWD projections include retirement ofbaby boomers and movement of their children into the workforce. Alaskans aged 65and over now account for about 9 percent of the state’s population. By 2025, seniorswill account for over one-quarter of the population.

Juneau Area Forecast

The DOLWD Juneau area population growth rate projections, in five-yearincrements, range from 0.4 percent in the low case to about 1.0 percent in the highcase. At these rates Juneau population could be between 33,000 residents and 37,000residents, with a middle case of about 34,500 by 2018.

Table 2DOLWD Population Projections for the City and Borough of Juneau

Projection Population Change Average Annual Rate of Change

Year Low Middle High Low Middle High Low Middle High

1998 30,236 30,236 30,236 - - - - - -

2003 31,204 31,388 32,036 968 1,152 1,800 0.63% 0.75% 1.16%

2008 31,914 32,413 33,727 710 1,025 1,691 0.45% 0.64% 1.03%

2013 32,568 33,475 35,521 654 1,062 1,794 0.41% 0.64% 1.04%

2018 33,120 34,447 37,248 552 972 1,727 0.34% 0.57% 0.95%

Source: Alaska Department of Labor, Research and Analysis Section, Demographics Unit.

4 Alaska Economic Trends, September–October 1998, Alaska Department of Labor.


Statewide Forecasts

Alaska’s overall growth rate is predicted to be somewhat higher than Juneau’s, atbetween 0.7 percent and 1.5 percent over the 1998 to 2018 period. A subsequentDOLWD article published in Alaska Economic Trends article in the September-October1998 provided population projections to 2025.

The Department of Labor’s website offers the following advice when using thepopulation projections:

This set of projections was based on our preliminary 1998 estimates. Thefertility assumptions have proved to be higher than actual fertility. Our midseries projection for 2000 was about 635,400. The 2000 census for Alaska was626,932, about 8,470 lower than projected. Until new projections aregenerated, we suggest that the user subtract 8,470 from the publishednumbers to get a more accurate set of state projections.

Table 3DOLWD Population Projections for the State of Alaska

Mid-Series Projection Population Change Average Annual Rate of Change

Year Low Middle High Low Middle High Low Middle High

1998 625,676 628,436 631,108 - - - - - -

2000 629,831 635,370 640,788 4,155 6,934 9,680 0.66% 1.10% 1.52%

2005 650,335 670,418 690,455 20,504 35,048 49,667 0.65% 1.08% 1.49%

2010 672,869 708,928 745,349 22,534 38,510 54,894 0.71% 1.14% 1.55%

2015 697,621 750,941 805,532 24,752 42,013 60,183 0.72% 1.15% 1.55%

2020 721,136 793,232 868,853 23,515 42,291 63,321 0.61% 1.05% 1.49%

2025 739,148 832,993 934,876 18,012 39,761 66,023 0.41% 0.93% 1.45%

Statewide population trends are important to Juneau because of the community’srole as state capital. To a degree, the number of workers employed in stategovernment in Juneau depends on statewide demand for government services.Increasing population means increased demand for services.

U.S. Census Bureau

The U.S. Census Bureau Population Projections Program produces projections of theresident population for each of the 50 states and the District of Columbia by age, sex,race, and Hispanic origin, consistent with the national population projections.Although several alternative series are produced, the preferred series is a time seriesbased on the assumption that past and current trends will continue. Another series,the economic series projections, are based on state-specific data on births, deaths,international migration, and domestic migration. The time series projections tend tobe slightly higher than the economic series projections. The economic seriesprojections through 2025 suggest that the state’s population will grow at an averageannual rate of between 0.9 and 1.3 percent.

Census Bureau population projections for Alaska are consistent with DOLWDprojections. Relatively slow growth is expected, generally about 1 percent annually.


Table 4U.S. Census Bureau Population Projections for the State of Alaska

Time Series (Preferred) Economic Series

Year ProjectionIncrease inPopulation

Annual Rateof Increase Projection

Increase inPopulation

Annual Rateof Increase

1995 603,613 - - 603,641 - -

2000 653,293 49,680 1.5% 632,239 28,598 0.9%

2005 699,765 46,472 1.4% 658,796 26,557 0.8%

2010 745,171 45,406 1.3% 689,692 30,896 0.9%

2015 791,246 46,075 1.2% 727,864 38,172 1.1%

2020 837,797 46,551 1.1% 773,202 45,338 1.2%

2025 884,914 47,117 1.1% 824,906 51,704 1.3%

Transportation Planning Related Forecasts

CBJ Area Wide Transportation Plan

The CBJ Area Wide Transportation Plan (AWTP) “defines a framework fortransportation projects in the CBJ for the next 20 years.”5 For purposes of long-rangetransportation planning it was assumed that Juneau’s population would grow from30,000 to about 37,000 residents, based on an annual growth rate of 1 percent.Vehicle travel growth of 1.5 percent was also used in the AWTP. This growth ratehas been used on other transportation projects, such as the West Egan DriveCorridor Study.

The AWTP project did not include detailed analysis of potential population growthin Juneau. According to participants in the planning process, the 1 percent growthwas used because it represented a reasonable long-term growth, given currentconditions in the economy and recent past growth trends.

5 City and Borough of Juneau Area Wide Transportation Plan, Volume 1, Transportation Plan Recommendations.July 9, 2001. Prepared by the Department of Community Development.


CHAPTER 3. BASIC INDUSTRY CONDITIONS AND OUTLOOK

Ultimately, without economic opportunity, population growth will not occur overthe long-term. Therefore it is useful to consider trends or events that could affectJuneau’s economy. State government dominates Juneau’s economy, but tourism andfederal government are also important contributors to the local economic base.Trends in these industries, as well as others, will determine the magnitude ofeconomic growth in Juneau in the foreseeable future.

State Government

State government is Juneau’s largest employer, with approximately 4,400 jobs and$175 million in annual payroll. Including the indirect and induced employmentimpacts, state government accounts for 7,900 jobs and $250 million in payroll, orabout 45 percent of the local economy.

While state government remains the community’s dominant economic force, itsrelative importance in the Juneau economy has declined over the past 20 years. In1981, state government directly accounted for 36 percent of all jobs in Juneau. Todayit directly accounts for about 25 percent of all employment (4,400 jobs out of a totalemployment base of 17,200). Similarly, state government accounted for 41 percent ofall payroll in the economy 20 years ago, but now accounts for about 30 percent.

Table 5State Government and Total Employment in Juneau1981, 1991-2000, and Percent of Total Employment

1981 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

StateEmployment

4,141 4,518 4,530 4,373 4,301 4,315 4,318 4,232 4,237 4,271 4,284 4,444

TotalEmployment

11,496 14,081 14,518 14,612 15,294 15,812 16,165 16,518 16,461 16,660 17,045 17,288

Percent State 36% 32% 31% 30% 28% 27% 27% 26% 26% 26% 25% 26%

Source: Alaska Department of Labor, Employment and Earnings Reports.

State government employment has been driven primarily by available revenue.However, over the long-term, population growth in Alaska overall will determinestate employment in the capital city. As population grows, so too does the demandfor the kinds of public services provided by state government.

In the near term, funding will continue to be the key issue in state governmentemployment in Juneau. In 2004, state government employment in Juneau isexpected to decline as a result of budget cuts, and further cuts are likely. Decliningoil revenue, coupled with flat or increased spending, has resulted in significantbudget deficits (deficits filled by spending the steadily shrinking Budget ReserveAccount). According to Department of Revenue forecasts, Alaska North Slope (ANS)oil revenue is expected to continue declining through at least 2010. In fiscal year2003, ANS production taxes and royalties will total $1.2 billion. By FY 2010, ANSrevenues are expected to total about $775 million.6

6 Fall 2002 Revenue Sources Book, Alaska Department of Revenue, 2002.


In any case, development of new sources of revenue, including sales or income taxes,will be required to fill the gap left by declining oil revenue. Once these sources ofrevenue are in place, some measure of predictability and stability should be added tothe state funding and employment picture over the long term. In the meantime,Juneau can expect continued uncertainty and most likely some decline in stategovernment employment.

Events that could affect state government employment in Juneau include potentialoil development in the Arctic National Wildlife Refuge (ANWR) and development ofa gas pipeline. Development of ANWR could generate half a billion to $1.5 billion inannual revenues for the state, depending on how much oil is proven economicallyrecoverable.7 The issue of opening ANWR to oil exploration and development isbefore Congress. If approved, at the earliest, oil production could begin in sevenyears with peak production achieved some years after that. Development of ANWRwould affect Juneau’s economy through additional state revenues. Construction of anatural gas pipeline from the North Slope to southern markets is also at least severalyears away, if it occurs at all. The impact of gas line construction on Juneau’seconomy is uncertain, though some increase in state government revenues is likely.

The capital move issue is the “wild card” in Juneau’s future. A full capital movewould cost Juneau approximately 5,100 jobs, including 2,800 state government jobsand another 2,300 jobs in the support sector. The economy would lose $175 millionin annual payroll (including direct and indirect effects), and a total of 8,000 residents– one quarter of Juneau’s population.8

If state government grows over the long-term, following the predicted rate ofpopulation growth in Alaska (about 1 percent annually), state employment in Juneauwould grow from its current level of 4,400 jobs to about 6,000 jobs over a 30-yearperiod. This employment increase would result in a population increase of about4,800 residents.9

Tourism

The visitor industry is Juneau’s second largest industry in terms of employment.The industry creates an annual average of approximately 1,600 jobs and $30 millionin payroll, according to the latest estimates.

The visitor industry has been Juneau’s only growth industry in recent years. Cruiseship passenger traffic to Juneau has grown from 87,000 visitors in 1982 to 750,000 in2002. The economic impact of these visitors has increased at a similar pace, withcruise ship passengers now spending an estimated $90 million in Juneau annually.

The outlook for cruise traffic is for continued growth. One projection suggests thattraffic could increase to between 1.2 and 1.5 million passengers over the next tenyears.10 An issue is whether Southeast Alaska has the infrastructure necessary tohandle that level of growth. Construction of additional cruise ship docks is beingconsidered in Ketchikan and Sitka. Another cruise ship dock is being constructed inJuneau at the Rock Dump. Cruise ship port facilities are being developed in Hoonah

7 ANWR and the Alaska Economy: An Economic Impact Assessment. Prepared for SAFE by the McDowell Group,Inc. September 2002.8 The Capital Economy: An Assessment of the Economic Impacts of a Capital Move on Southeast Alaska. Prepared forthe Alaska Committee by the McDowell Group, Inc., August 2002.9 Estimate based on employment multiplier of 1.8 and participation rate of 0.6.10 Ketchikan Ports and Harbors Development Plan, B&A Associates, 2003.


and ships will begin calling there in 2004. A similar development is being consideredfor the Hobart Bay area. Given all of this, lack of infrastructure should not be aconstraint on growth. Perhaps of more concern is the quality of visitor experience inports where up to 10,000 visitors are already calling in a single day. However,development of new ports in remote areas and increased traffic to the lessfrequented ports will alleviate some of this overcrowding concern.

The independent visitor market (visitors arriving by ferry or airline) has been flat inrecent years, though little data is available. Estimates place total independent visitortraffic to Juneau at about 150,000. No significant change in independent visitortravel to Juneau is expected, though construction of a road out of Juneau orsignificantly improved ferry service could increase the number of highway travelersvisiting Juneau.

In summary, the cruise industry is likely to continue to be one of the few segments ofthe economy that grows over the next few years. If tourism employment in Juneaugrows at an average annual rate of about 2 percent, for example, total employment inthe industry would reach 2,900 jobs in 30 years, resulting in a population increase ofabout 5,800 residents.11 A 3 percent annual growth rate would generate populationgrowth of about 7,800 residents over 30 years.

Federal Government

The federal government accounts for about 1,000 jobs in Juneau and $60 million inannual payroll. It is Juneau’s third largest industry in terms of employment. Thelargest federal agencies in Juneau are the U.S. Coast Guard, the Forest Service andthe National Oceanic & Atmospheric Administration (NOAA). Federal employmentin Juneau has been trending down and is now about 200 jobs below the 1990 level.There is no indication that federal government employment will significantlydecrease or increase in the foreseeable future. Growth that does occur in Juneaushould be in response to local and regional population growth, which will result inincreasing demand for federal government services.

Other Basic Industries

Mining: Mining accounts for about 290 jobs in Juneau, nearly all at the Greens CreekMine on Admiralty Island. Workers reside in Juneau and commute to the mine on adaily basis. An environmental impact statement (EIS) has recently been completedon a project that will provide for expansion of the mine’s tailings disposal facilities.With this expansion, and given measured ore reserves, the mine should continue tooperate for another ten years. Discovery of additional reserves could increase themine’s life. Closure of the mine could have a direct or indirect impact on between 2percent and 3 percent of Juneau’s population (based on the current population).

The Kensington Mine development project is moving forward, with constructionbeginning as early as 2004. Development of the mine will create 225 permanent,year-round jobs in Juneau. Like Greens Creek, Kensington miners would reside inJuneau. Development of the Kensington would result in a population increase inJuneau of approximately 500 to 600 residents. Based on current ore reserves, themine has an anticipated life of about ten years.

11 Estimate based on employment multiplier of 1.5 and a participation rate of 0.75.


Seafood: Commercial fishing and seafood processing account for about 5 percent ofJuneau’s basic economy. A total of 541 Juneau residents held commercial fishingpermits in 2000, according to the Commercial Fisheries Entry Commission (CFEC).These fishermen harvested 17.5 million pounds of seafood with an ex-vessel value of$15 million (ex-vessel is the amount fishermen are paid for their fish by processors).In addition, 412 Juneau residents purchased crew licenses in 2000. Based on acommercial fishing employment model developed by the McDowell Group, whichconsiders the length of commercial fishing seasons and crewing practices in eachfishery, this translates into the equivalent of about 300 year-round jobs and $9million in skipper and crew personal income in 2000.

In 2001, Juneau processor employment totaled an estimated 65 jobs, with anestimated $1.8 million in payroll. Taku Smokeries accounts for about 80 percent ofJuneau’s seafood processing employment. While much of Alaska’s processing sectorhas been struggling, Juneau’s processing sector has been growing. The volume ofhalibut processed in Juneau increased from less than 500,000 pounds in 1995 tonearly 3 million pounds in 1999. Ex-vessel value of halibut processed in Juneauincreased nearly seven-fold, from $675,000 in 1995 to $4.6 million in 1999. Blackcodproduction volume increased from 180,000 pounds in 1995 to 1.2 million pounds in1999, while ex-vessel value increased from $355,000 to $3 million.

Douglas Island Pink and Chum (DIPAC) is also an important part of Juneau’sseafood industry. Last year (2001) DIPAC employed an average of 45 workers, withpeak employment at 79.

The outlook for the seafood industry in Juneau is uncertain. Salmon fishermen willcontinue to struggle with low prices. Participation in the salmon fisheries is likely tocontinue declining. On the other hand, the longline fisheries are expected to remainstrong (halibut farming is occurring in Europe, but does not at this time appear torepresent a real threat to Alaskan fishermen). Value-added processing also holdssome promise for Juneau’s seafood industry. Fish waste utilization projects, ifproven technically and economically feasible, could increase employmentopportunities in Juneau over the long-term.

Summary

Over the long-term, employment is expected to grow slowly in Juneau, at between1.0 and 1.5 percent annually, mostly as a result of tourism-related growth and (laterin the forecast period) state government growth. This rate of job growth is slightlylower than in Juneau’s past. Over the past ten years, employment in Juneau hasgrown at an annual rate of 1.8 percent, and over the past 20 years, 2.1 percent. Overthe past five years, employment growth has slowed to about 1.2 percent annually.

Juneau’s economy will continue to be subject to events and developments that couldgenerate relatively sudden population shifts. For example, some decline in stategovernment employment is likely in 2004 and perhaps the following years as thestate struggles to establish a stream of revenue to replace the decline in oil revenues.Also, development of the Kensington mine could push Juneau’s employment baseup by 2 percent or more over a three to four year period. However, while year-to-year fluctuation is to be expected, over the long-term employment is expected togrow slowly. Additional tourism-related expansion will be the primary engine forthis growth, as well as additional state government growth later in the forecastperiod. This, of course, assumes that both the Legislature and Capital remain inJuneau.


CHAPTER 4. 30-YEAR CBJ POPULATION FORECAST

Based on the demographic and economic trends outlined in the preceding chapters,the study team prepared low, middle and high case population forecasts for Juneauthrough the year 2035. These forecasts are based on a simple employment-basedmodel which links assumptions about employment growth in Juneau’s basicindustries with long term population growth. Each case is described below in termsof assumptions about the forces at work in the economy.

Low Case Scenario

• In the near-term Juneau’s economy suffers from a decline in stategovernment employment, resulting from budget cutting measures.

• Over the long-term the state’s population grows slowly and stategovernment grows only as needed to support the additional statewidepopulation growth, predicted to be around 0.9 percent annually.

• North Slope oil revenue continues to decline and a state income tax isinitiated, as well as other revenue enhancement measures, adding some long-term stability to the local economy.

• ANWR is not developed. The gas line is developed late in the forecast period.

• The cruise ship market matures in Alaska and traffic to Juneau levels off (orgrows very slowly) after about five to seven years.

• The Kensington mine is not developed and the Greens Creek mine closes inabout 10 to 12 years.

• Federal government employment remains stable over the forecast period,growing only in proportion to local and statewide population growth.

• Access to West Douglas is not improved and a shortage of affordabledevelopable land constrains growth in Juneau.

• Both the Legislature and the Capital remain in Juneau.

• Birth rates remain relatively low throughout the forecast period.

The low case population projection shows essentially very slow growth for Juneau.Juneau’s 2002 population estimate was 30,981. This projection assumes 0.5 percentgrowth over the forecast period, which pushes Juneau’s population to about 37,500residents in 2035. This is an increase of nearly 6,500 residents over the forecastperiod.

Middle Case Scenario

• The state’s population grows moderately and state government employmentgrows at about the same pace, around 1.0 to 1.5 percent annually.


• North Slope oil production and associated revenue is stable in the near termbut declines toward the end of the forecast period. A state income tax andother revenue measures are initiated, adding some long-term stability to thelocal economy.

• ANWR is not developed and the gas line is developed within 10 years.

• The cruise ship market matures in Alaska and traffic to Juneau levels off afterabout 10 years.

• The Kensington mine is developed within five years and remains inoperation for 20 years. Greens Creek mine closes in about 10 to 12 years.

• Federal government employment remains stable over the forecast period,growing only in proportion to local and statewide population growth.

• Access to West Douglas is not improved and a shortage of affordabledevelopable land constrains growth in Juneau.

• The middle case assumes that both the Legislature and the Capital remain inJuneau.

• Birth rates increase as the baby-boom “echo” population reaches adulthood.

The medium case population projection for Juneau is for a 1 percent annual growthrate, lifting the local population to about 42,800 residents by 2035. This representsabout 12,000 new residents.

High Case Scenario

• The state’s population grows moderately and state government employmentin Juneau grows at about the same pace, around 1.5% annually.

• Oil prices increase over the forecast period and oil-related revenue growsslowly over the forecast period. A state income tax and other revenuemeasures are initiated, adding long-term stability to the local economy.

• ANWR is not developed and the gas line is developed within 10 years.

• The cruise ship market matures in Alaska and traffic to Juneau levels off afterabout 15 years.

• The Kensington mine is developed and remains in operation throughout theforecast period and the Greens Creek mine closes in about 20 years.

• Federal government employment increases slowly over the forecast period,growing in response to local population growth and increased managementresponsibilities for federal resources (USFS, USCG).

• Access to West Douglas is improved with a second crossing and significantcommercial and residential development occurs in the area.

• The high case assumes that both the Legislature and the Capital remain inJuneau.


• Road access to Juneau is completed, stimulating some economic growth inJuneau.

• Birth rates increase as the baby-boom “echo” population reaches adulthood.

The high case population projection for Juneau is 50,500 residents by 2035. This isalmost 20,000 new residents over the forecast period and represents a growth rate of1.5 percent. This is slightly more than the 20-year historical growth rate of a 1.4percent.

Figure 230-Year Population Forecasts for City and Borough of Juneau

-

10,000

20,000

30,000

40,000

50,000

60,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

Low

MediumHigh

Source U.S. Census and Alaska Department of Labor and Workforce Development, DemographicsSection. Forecasts are from McDowell Group.

The low, middle and high case population forecasts all have about the same level ofprobability, given assumptions made to support each case. All are generallyconservative forecasts, with the potential impacts of major unpredictable events,such as a capital move or development (and production of) a substantial volume ofoil from ANWR excluded.


CHAPTER 5. ROLE OF WEST DOUGLAS IN

JUNEAU’S POPULATION GROWTH

An important objective of this study is to assess the role of improved access to NorthDouglas and the West Douglas area (and subsequent development of that area) inthe timing and magnitude of population growth in Juneau.

A variety of factors will determine how North and West Douglas might fit intoJuneau’s long-range development. These include:

• The City’s official position with regard to growth and its land on North andWest Douglas.

• The private sector’s (Goldbelt’s) interest and plans for development in WestDouglas.

• The availability of land in the borough to meet Juneau’s long-term growthneeds, other than that available on Douglas Island.

This chapter addresses these and related factors. It is important to recognize theclassic “chicken or the egg” dynamic at work with respect to West Douglas. In theabsence of an appropriately located second crossing, development of West Douglasis likely to occur very slowly, if at all. On the other hand, construction of a secondcrossing may be unlikely in the absence of a demonstrable economic development ortraffic-related need. The issues discussed in this chapter can only provide a contextfor development of West Douglas. The particulars of specifically when and whattype of development will occur is impossible to predict. However, it is possible todetermine if a fundamental infrastructure need will exist for better access to DouglasIsland, given predicted population growth.

CBJ Land Management Plan

In addition to 3,400 acres on West Douglas, the CBJ has extensive land holdingselsewhere in the borough that are slated for long-term disposal. These land holdingsinclude:

• 164 acres above the community of Douglas

• 335 acres at Lena Loop and Auke Rec By-Pass

• 260 acres on the tip of Mendenhall Peninsula

• 352 acres on Pederson Hill near Auke Lake

• 406 acres on Mendenhall Peninsula

• 654 acres on North Douglas between Grant Creek and Falls Creek

• 2,155 acres on North Douglas between Bonnie Brae and Fish Creek

• 310 acres near the Auke Bay Ferry Terminal

These 4,600-plus acres provide significant capacity for residential growth, assumingof course that adequate access and utilities are available. Lack of access is a majorhindrance in the development of these parcels due to the substantial investmentrequired. Access road(s) to the majority of the sites are also necessary to enable and


promote the development of the utility infrastructure. Most of these parcels willmove to the list of properties for “immediate” disposal only when sewer systems arein place. This represents a significant constraint on development, given that disposalcan only occur after the city finds the very substantial funding necessary to installsewage disposal systems. Otherwise, the parcel sizes have to be larger, as in therecent Lena Point land disposal, to accommodate on-lot systems or an independentneighborhood collection system.

It should be noted that 60 percent of the property on the CBJ’s long-term landdisposal list is on Douglas Island in areas that would directly impact the need forand usage of a second crossing.

Another important issue is the cost of development in these areas. Site developmentcosts are an increasingly significant portion of housing construction costs in Juneau.Evaluating site development costs associated with residential development on theCBJ land listed above is far beyond the scope of this study. It has been pointed outby CBJ officials, however, that the West Douglas area offers land with the bestpotential for residential and industrial development.12

CBJ Comprehensive Plan

The City and Borough of Juneau Comprehensive Plan states that four of the mostlikely sites for new growth are Echo Cove, and west, south and north DouglasIsland. In the Comprehensive Plan, the West Douglas area is designated as a “NewGrowth Area.” The Comprehensive Plan defines a new growth area as:

Sites in rural areas potentially suitable for urban/suburban residential development– characterized by urban densities and a full complement of services and facilities,including water and sewer, recreational, educational and neighborhood commercialservices. Non-residential uses such as port facilities or resource-related industrialdevelopment, may also be important.

The CBJ Comprehensive Plan describes New Growth areas as the preferred futurecommunity form:

Compact growth in urban area is preferable because there the use of land is moreefficient, urban services are more economically provided and maintained; adverseenvironmental impacts are minimized; and the majority of residents who prefer ahigh level of services are better served….Development of new growth areas assatellite communities [is] the most desirable way to accommodate growth outside theurban area.

The authors of the West Douglas Conceptual Plan interpreted this and other languagein the Comprehensive Plan as clear direction that land use in the West Douglas areashould be located in “compact urban areas within the more rural setting.” The WestDouglas Concept Plan proposes a development “node” concept for the area, asdescribed in the next section.

The Comprehensive Plan also identifies West Douglas as a “Resource Reserve.” Thisland use designation is applied where it is appropriate to conserve the area untilmore specific land uses are identified, approved and developed.

The Comprehensive Plan also points toward the need for additional property forcommercial and industrial development potential:

12 “Land for new houses grows rare”, Juneau Empire, August 31, 2003.


• It is advisable to have more than a 15-year supply of vacant land in somecategories, especially commercial and industrial, to facilitate long-range planningfor needed public services and facilities…

• The major port facilities for commercial and industrial goods and materials arelocated on the southern part of the downtown waterfront. Because of geographyand development pattern of that area, room for expansion is limited. In addition,traveling up the Gastineau Channel is a significant detour for most barge traffic.Truck traffic to and from the port adds to the noise and congestion in thedowntown area.

Commercial and industrial development are envisioned for the West Douglas area,as articulated in the West Douglas Conceptual Plan.

CBJ and Goldbelt West Douglas Conceptual Plan

The West Douglas planning area is located on the northwest side of Douglas Islandbeyond the present end of North Douglas Highway. It extends as a belt about 1 milewide and 8.5 miles long along the west shore of the island. Most of the area is on abench bounded on the west by Stephens Passage and on the east by the highmountain ridges of Douglas Island.

The CBJ and Goldbelt, Inc. own adjoining properties along approximately eightmiles of West Douglas Island. Goldbelt’s property covers 1,740 acres along theshoreline, stretching from Outer Point to a point approximately a mile south of PointHilda. The width of the property averages between 1/4 and 1/2 mile. The City andBorough’s property covers 3,434 acres immediately inland of the Goldbelt land andis also relatively narrow (average 1/2 mile). Immediately upland is undevelopedUnited States Forest Service land, part of the Tongass National Forest.

Both CBJ and Goldbelt have long been interested in exploring developmentpossibilities for the area. In 1995 Minch Ritter Voelckers was hired as lead consultantto perform conceptual planning and land use analysis. MRV conducted land surveyand reconnaissance work, and established overall planning goals and a conceptualdesign using input from CBJ, Goldbelt, and the public. After a review of variousdraft plan alternatives, Goldbelt’s Board of Directors and the CBJ PlanningCommission approved the general conceptual plan. (The study effort took intoaccount concurrent planning by separate parties to develop a golf course in the area.)

The CBJ and Goldbelt each have their own goals for the property. Goldbelt isinterested in uses that “simultaneously protect the environmental qualities of theland, provide for continued shareholder recreation opportunities, and developrevenue.”13 The CBJ is more committed to satisfying community needs – for examplehousing, recreational opportunities, and commercial infrastructure. The CBJ is alsocommitted to retaining the environmental attributes of the area.

Conceptual Plan Development Recommendations

MRV’s land surveying efforts established that while many large areas of the land inquestion were inappropriate for development, other portions of the property were“very attractive.” The report recommends that the area be developed in terms of five

13 Minch Ritter Voelckers, West Douglas Conceptual Plan. Prepared for the City and Borough of Juneau andGoldbelt, Inc., May 1997.


discrete nodes – “high-density developed portions separated by lower use and/orprotected regions.” These compact areas will provide a full complement ofresidential, commercial, industrial and recreational uses. The development schedulewould be phased, driven by population growth, land needs, and developmentopportunities.

This land use concept takes into account Goldbelt’s goals of keeping large areas ofthe land undeveloped, and also follows CBJ’s preference as stated in the CBJComprehensive Plan for promoting compact urban sites.

The proposed development areas are referred to as Area 1-A, Area 1-B, Area 2, Area3, and Area 4, with Areas 1-A and 1-B closest to the current road and Area 4 thefarthest away.

Development Area 1-A

This development area is located approximately two miles beyond Outer Point andcovers about 120 acres, including one-half mile of beach frontage. It is recommendedthat this site include significant housing (up to 700 units) and a supportingcommercial core. Recommended acreage according to usage is: open park and publicspace (15 acres), commercial (15 acres), mixed use (15 acres), high density housing(15 acres), medium density housing (30 acres) and special uses (such as a lodge oroffice complex; 30 acres). This area would support a population of about 2,500.

Development Area 1-B

This development area is located on the upland side of the proposed road, just northof Area 1-A. It includes the proposed golf course (approximately 200 acres) andadjacent, dispersed housing. Residents are expected to utilize the commercialsupport of Area 1-A.

Development Area 2

Area 2 is located at Inner Point (about two miles along the shoreline furthersoutheast of Area 1-A) and covers about 50 to 70 acres. The primary function of thisarea will be for water-dependent industrial, commercial, and possibly recreationaluses. The potential for marine activity is positive due to a high water depth andstorm protection. Most development in this area is expected to be of eitherwaterfront industrial or waterfront commercial nature. Possible developmentsinclude a dock, boat launch, breakwater, ice plant, fish processing facility, fuelingservice, and fuel storage facility.

Development Area 3

Development Area 3 is located less than a mile beyond Inner Point and coversapproximately 80 acres. The area will be developed primarily for residentialpurposes (600 units) with some recreational zones, which may include publiccamping, beach access, and RV accommodations. Acreage and usage is assumed tomatch the following: open and public areas (10 acres), mixed use (commercial,housing; 15 acres), high density housing (15 acres), medium density housing (20acres), low density housing (20 acres), and special uses (RV, camping; 20 acres). Atarget population of 2,000 is assumed for this area.


Development Area 4

Development Area 4 covers about 100 acres located nearly 10 miles southeast ofOuter Point (along the shoreline). This area is not expected to be developed for anumber of years due to extensive road and utility development costs, and the needto cross environmentally sensitive lands at Hilda Creek. Because it will be separatedfrom other commercial centers, it will likely support commercial and industrialactivity in addition to a major housing component (750 units). Acreage and usage isexpected to include: open and public areas (15 acres), mixed use (commercial,housing; 15 acres), high density housing (15 acres), medium density housing (25acres), low density housing (20 acres), and special uses (marina uses; 10 acres). Area4 would support a population of about 3,000.

West Douglas Market Assessment

In 1992 the Alaska Department of Commerce and Economic Development funded astudy of the development potential for the West Douglas area. The MarketAssessment and Cost/Benefit Analysis of the West Douglas Project examined the potentialfor development of a wide range of port and industrial uses.14

The West Douglas market assessment considered a two-phase development scenariothat had been defined by Goldbelt, Inc. Phase I included construction and operationof a barge landing in the Inner Point area. Uplands development could include afreight staging area, a tank farm and warehouse. The Phase II development wouldbe market-driven but could include a deepwater port, a small boat marina, seafoodprocessing facilities, boat repair and service, other commercial and marine uses andresidential development.

The West Douglas market assessment found that there was a limited commercialmarket for a proposed barge landing located at Inner Point, because the cost oftransporting fuel and freight over the 17 miles from the barge landing to thedowntown area represented a serious competitive disadvantage compared toexisting barge facilities. Phase II development was also contingent upon a secondcrossing. The study identified some market potential for cruise ship related traffic,marina-related usage, small-scale fish processing, and residential development.

Regarding the second crossing, the 1992 West Douglas market analysis concluded:

...a second crossing would play a critical role in the timing and magnitude ofindustrial, commercial and residential development of the West Douglas area.

And:

The proposed site of the West Douglas development is 17 miles from the downtownarea and in fact 17 miles from any service and supply center. That represents a 17mile disadvantage that freight or fuel distributors would have compared to thecompetition based in town.

The study also points out that the West Douglas area provides no property taxbenefits to the City and Borough of Juneau. The 3,400 acres of city-owned property

14 A Market Assessment and Cost/Benefit Analysis of the West Douglas Project. Prepared for the AlaskaDepartment of Commerce and Economic Development by McDowell Group, Inc., July 1992.


will generate tax revenue only after it is sold, and Goldbelt’s 1,700 acres will betaxable only after the land is developed.

Other West Douglas Development Considerations

According to a Goldbelt representative, development of the corporation’s land in theWest Douglas area is contingent upon construction of a second crossing. In theabsence of a second crossing, no development is planned in the immediate future.15

Regional transportation planning includes highway and ferry connections linkingthe Juneau and Hoonah areas via road and ferry links from West Douglas. The USForest Service’s Southeast Alaska Proposed Public Road and Ferry Projects, prepared forthe Southeast Conference, identified various road and ferry projects with long-termdevelopment potential in the region. A proposed route between Juneau and Hoonahincludes 4.5 miles of new road from the end of the existing North Douglas Highwayto Middle Point. A ferry service would cross Stephens Passage to Young Bay wherean existing two-lane road connects to Hawk Inlet. From Hawk Inlet another ferryconnection would link to the Chichagof Island road system and the community ofHoonah. This $124 million project has only very long term potential, but doesrepresent additional future use of the West Douglas area.

Summary Analysis

West Douglas Housing Development

Based on the population forecasts made in this study, Juneau’s population couldgrow by between 6,500 (in the low case) and 20,000 (in the high case) new residentsover the next 30 years. This translates into a need for between 2,500 and 7,700additional housing units, based on an average household size of 2.6 persons perhousehold.

From a housing perspective, the community’s need for better access to DouglasIsland depends on the existing infrastructure’s capacity for additional housingdevelopment. A 1992 McDowell Group study found that Juneau’s infrastructurecould accommodate 3,000 additional housing units over the current (then, in 1992)inventory of 10,500 units. Since 1992, Juneau’s housing inventory has increased byabout 2,000 units. With expansion of utilities, since 1992, to areas such as Back LoopRoad, and additional infilling, the community (excluding Douglas Island) probablyhas the capacity for an additional 1,000 to 1,500 housing units. Beyond that, the onlyarea with significant housing development potential is the CBJ land in the WestMendenhall Area, including Pederson Hill area and Mendenhall Peninsula, a total ofabout 1,000 acres. This area may have a housing development capacity of between1,500 and 2,500 housing units, depending on the density of development.

With capacity for an additional 2,500 to 4,000 housing units, Juneau appears to haveadequate space to meet future housing needs in the low case growth scenario (0.5percent per year population growth, resulting in demand for 2,500 new housingunits). However, Juneau will continue to struggle with high housing costs resulting

15 Goade, David, Goldbelt, Inc., Vice President, personal communication, September 2003.


from high site development costs. Development of the West Mendenhall area wouldbe required.

In the middle case population forecast, an additional 4,500 housing units would beneeded over the next 30 years. This is somewhat more than the community’savailable capacity of between 2,500 and 4,000 units.

In the middle case population forecast (and even in the low case), growth in theabsence of a second crossing would result in in-filling of almost all available landand likely higher densities than are now typical of Juneau. Further, high sitepreparation and related development costs would be expected.

The high case population forecast of 1.5 percent annual growth would result indemand for an additional 7,700 housing units, almost double what is availablewithin Juneau’s existing infrastructure, plus the West Mendenhall area. Thissuggests that development of Douglas Island acreage will be required to meet thecommunity’s long-term needs.

Some Douglas Island property can and will be developed in the absence of improvedaccess. The West Juneau and Douglas proper areas both have some, though limited,capacity for additional housing development. Significant housing development inthat area is unlikely (or at least would be discouraged by the CBJ) given the trafficcongestion-related problems already being experienced along Douglas Highway andthe Douglas Bridge. Similarly, further housing development along North Douglashighway in the absence of a second crossing is unattractive because of traffic andsafety concerns. North Douglas Highway is a 45-mph highway with directresidential driveway access. Additional housing development in the area wouldexacerbate an already difficult traffic environment.

In summary, a second crossing would clearly be required, in the high-casepopulation forecast, to meet the community’s long-term housing needs. In themiddle case, the need for a second crossing is less compelling, however, full build-out of all available property and high-density development would be required.Further, by the end of the forecast period, about all of Juneau’s available land willhave been developed. The community will continue to face high construction costs,and development of the West Mendenhall area would be required. In the low case,Juneau appears to have adequate space to accommodate long-term housing demand,assuming the West Mendenhall area is developed. Again, however, communityexpansion with the existing infrastructure will do nothing to relieve the high cost ofhousing development in Juneau.

West Douglas Business Development and Employment

Employment growth in the West Douglas area is expected to be narrowly focused,initially. Golf course related business development is likely to be the first type ofdevelopment in the general, located near the end of the existing North DouglasHighway. Following that, the types of businesses most likely to locate in the areainclude those related to marine support services, freight shipping and handlingservices, seafood processing, and visitor-related services. Later in the area’sdevelopment (as the West Douglas population and commercial activity grow), moreretail and service-oriented business would locate there.

In any case, employment growth is not expected to occur at the same rate asresidential growth. The employment needed to support Juneau’s predictedpopulation expansion will occur primarily in existing commercial areas: downtown,


the Airport/Valley area, as well as the Lemon Creek area. Juneau has more capacityfor commercial growth, within existing infrastructure, than it does for residentialgrowth. In-filling of commercially zoned areas, and redevelopment of commercialareas allowing for higher density commercial activity, provide significant long-termcommercial development opportunities in Juneau. The exception to this is waterfrontindustrial/commercial property, which is limited, and which West Douglas accessand development could provide. In other words, long-term demand for housing andwaterfront commercial property, not general commercial development, indicate theneed for better access to North and West Douglas.

Bridge Location Considerations

A number of second crossing locations are being considered. The location of thecrossing is important in terms of West Douglas development and overall communitydevelopment. The key factor in any residential development is distance and traveltime to commercial centers. Juneau has two commercial hubs, the downtown areaand the airport/Valley area. For West Douglas, the crossing location that providesthe most immediate access to Egan Drive and the airport/valley commercial areawill generate the highest level of development.

Long-term improvements to Egan Drive include overpasses or other intersectionimprovements at the Loop Road, McNugget, Yandukin (Fred Meyer), Sunny Point,Vanderbilt Hill and Salmon Creek intersections. These improvements willstreamline traffic flow along Egan Drive, especially during peak hour traffic, andwould induce commuter and other traffic traveling to and from West Douglas to useEgan Drive rather than North Douglas Highway.

The crossing location that provides the most immediate access to Egan Drive and theairport/valley commercial area would spur the greatest level of development in theWest Douglas area. This suggests an optimal crossing location between VanderbiltHill and Industrial Boulevard.

A Mendenhall Peninsula crossing location would provide the most immediate accessto West Douglas, simply in terms of travel distance to existing roadways. A crossingin that area could also facilitate infrastructure development in the MendenhallPeninsula area, where future housing development may be required. However, aMendenhall Peninsula crossing may not provide the most immediate access to EganDrive and Juneau’s commercial/employment centers.

A Salmon Creek crossing location could provide the necessary access to developableCBJ land in the North Douglas area (to meet long-term housing needs), but a benchroad may be required to address traffic concerns on North Douglas Highway. ASalmon Creek crossing would not be optimal, relative to other crossing options, interms of providing access to the West Douglas area.

city and borough of juneau population forecast

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