Building Business: Alaska Native construction subsidiaries provide shareholder jobs, financial benefits.

• Author: Newman, Amy

Investing in and operating construction subsidiary businesses helps Native village and regional corporations meet their dual mandate to make money to benefit shareholders and provide for their cultural, educational, and social wellbeing. The income generated from these businesses provides both immediate and long-term benefits to the corporations and their shareholders.

"There are two real key factors that go back to CIRI's overall premise for the investments we make," says Sophie Minich, president and CEO of CIRI. "We rely upon the cash that's generated by our investments to pay our dividends and to continue to grow CIRI with additional investments in a variety of ways."

And while traditional Native values and a desire to support individual regions are the driving force behind the work of every Native corporation and its subsidiaries, on a large scale they operate similarly to parent-subsidiary arrangements in the private sector.

"It's certainly different, but it's not all that different," says Clayton Arterburn, senior vice president of Ukpeagvik Inupiat Corporation (UIC) Commercial Services.

The Road to Construction

Like any business endeavor, the singular goal of every Native corporation's construction subsidiary is to provide income to support its overall mission. But the "how" and "why" behind the decision to form a construction subsidiary varies. For some corporations, the decision was driven by shareholder preference or is a natural expansion of work shareholders were already engaged in.

Ahtna, for example, started its first construction subsidiary shortly after ANCSA was signed based on shareholder input.

"One of the first things the corporation did [when we organized] was send out a questionnaire asking our shareholders about their interests," says Roy Tansy Jr., COO of Ahtna Netiye', holding company for Ahtna's sixteen subsidiaries. "One of the things brought forth was that there was interest in starting a construction company. Many of our shareholders had experience doing construction, even before statehood; there was a lot of interest to keep that going."

UIC Construction capitalized on its experience working in remote villages during harsh weather conditions and created a niche for itself working in these small Alaska communities.

"UIC initially started in Barrow doing work on roads, utilities, things of that nature," Arterburn explains. "We took our skills that we developed with logistics. with working in remote locations, with dealing...