Haines: a backwoods boomtown.

• Author: Morphet, Tom

As the state's third-fastest growing community, this Southeast town struggles to keep its economy stable.

Living in Haines used to be a matter of surviving the long spells between bust and boom. But in the 1990s, the economy and population of Haines are expanding steadily, fed by some untypical sources and trends.

State census figures show the town and the surrounding Chilkat Valley (population 2,489) was the fastest growing community in Southeast in 1994 and third-fastest growing in the state, with an average annual growth rate of 6.31 percent since 1990.

The real estate market is busy. Annual sales totals have doubled in the past six years, a period that saw prices climb and beachfront property values double.

Retail sales also are up, climbing 5 percent annually since 1992. Sales last year were $2 million more than in fiscal year 1990, when the town's sawmill was running and filming of the movie "White Fang" dropped $3 million into local cash registers.

The number of businesses operating in the Haines Borough likewise has surged, from 263 in 1989, to 354 in 1993 and 495 in 1994.

But by Alaska standards - and ones until recently used here - Haines should be no better off than other mill towns gone bust. The 1991 closure of the Chilkoot Lumber sawmill eliminated the valley's biggest private employer, costing 120 full-time jobs and an annual payroll of $5 million. Unemployment soared.

The local gillnet fleet, though established, has struggled for five years against the worldwide salmon glut. The number of locally held fishing permits has dropped 10 percent. The town's fledgling tourism industry is gaining strength, but sees less than one-quarter of the region's visitors.

"In 30 years I've seen this town boom and bust many times. But I've never seen the town boom without a reason before," says city clerk Susan Johnston. Growth crosses Johnston's desk in the form of building permits.

In the first 11 months of 1994, she processed 76 such permits, including 13 housing starts. That compares to 53 building permits total in 1993 and 36 in 1992. (Johnston's figures don't include development outside the city, the 10-square-mile commercial core of the 2,600-square-mile Haines Borough.)

Luring Cheechakos

Since its founding as a Presbyterian mission in 1879, no single industry has kept a hold on Haines. Gold discovered in the Porcupine River district in 1898 brought hundreds of prospectors, and eventually mining companies that worked streams in the upper Chilkat Valley until 1937.

By then, the town had been established by the Army post at Fort William H. Seward (built in 1904), and sustained by salmon canneries milking the abundant returns of sock-eye to Chilkoot and Chilkat inlets. The first commercial sawmill opened in 1939.

Fort Seward was sold as military surplus in 1946, but the Army returned seven years later to build the $54 million Haines-Fairbanks oil pipeline. A Cold War creation aimed at supplying Air Force bombers with fuel, the pipeline and Haines tank farm provided more than 100 local jobs through 1971.

Milling fortunes peaked in the late 1960s, when two local sawmills exported more than 50 million board...