Behind the headlines with AIDEA: authority continues to fund Alaska projects.

• Author: Bjorn-Roli, Per E.
• Position: BUILDING ALASKA - Alaska Industrial Development and Export Authority - Column

Several years ago I was hired to appraise the proposed Cruise Ship Berth IV in Ketchikan on behalf of a major lender. The long flight aside, this was a dream assignment for an appraiser and I was pleased to be involved. Upon initiating the assignment I knew immediately that the Alaska Industrial Development and Export Authority (AIDEA or simply, "the Authority") was involved in the deal, because the client ordered 10 copies of the appraisal--one for each AIDEA board member. Ultimately, Berth IV was built. Today, Berth IV contributes millions to the Ketchikan economy and is a major addition to the tourist infrastructure of Alaska.

In Alaska, the appraisal business, like all commercial real estate, is directly influenced by AIDEA. Like appraisers, AIDEA sometimes does not get the credit they deserve for their contribution to the Alaska economy. Admittedly, both work behind the scenes and are not exactly headline material.

BIG CONTRIBUTOR

Most Alaskans would be shocked to learn that since its dividend program was established in 1996, AIDEA has provided more than $251.3 million to the State coffers. This includes a $22.72 million dollar distribution in 2008. Simply put, the owners of AIDEA (the people of Alaska) are receiving a positive return on their investment, which is something that can not be said today of very many other financial institutions, let alone government-owned entities. But the dividend program itself represents only a small part of the benefit AIDEA provides to the state of Alaska and its residents.

AIDEA is unique to Alaska, only one other state (Pennsylvania) has a similar agency. As a public corporation established by the Alaska Legislature in 1967, the Authority's mission has always been "to encourage economic growth and diversification in Alaska by providing various means of financing and assistance to Alaska businesses." AIDEA Executive Director Ted Leonard further qualifies this. "AIDEA helps promote economic development by providing financing to viable projects that the private sector would not, or could not, finance without our participation," Leonard said. Most market participants view the Authority as a partner with the private sector, rather than a competitor, according to Leonard.

INDUSTRIAL DEVELOPMENT

AIDEA fulfills its mission through the Development Finance Program and six different credit programs. Through the Development Finance Program (DFP) the Authority develops, owns and operates facilities within the...