Moving beyond the move.

• Author: Swagel, Bill
• Position: Juneau, Alaska - Includes related article - Towns in Transition

Buoyed by increasing numbers of tourists, state government and the re-opening of its mines, the state's capital boasts a booming economy. But these assets come with a price, forcing Juneauites to debate how to handle growth.

When the 1994 voter initiative to move the capital from Juneau to southcentral Alaska made it to the ballot, hammers fell silent throughout the Mendenhall Valley, Juneau's bedroom suburb about 10 miles from the historic downtown.

State government employment is the largest single sector of the Juneau economy, and although only the Alaska Legislature was slated to move, people feared the myriad state agencies that are peppered throughout the downtown area would eventually follow, destroying the economy.

But last November, Alaska voters, no doubt aware of the massive price tag of such a move in a time of already shrinking state dollars, rejected the proposal by a 55-45 percent margin. Juneau residents breathed a sigh of collective relief.

Lydia Harris, an assistant project manager for the McDowell Group, a well-known Southeast economic research firm, remembers one builder near her Valley home ordering work on two houses to stop the very day the capital-move proposal was authorized. The day after the vote, work resumed.

Juneau lumber and building supply dealer Don Abel also saw the storm clouds part. With the lynch-pin of the Juneau economy firmly in place, orders began to flood in. The city estimates that 150 single-family homes and more than 300 apartment units will be built this year to help relieve the pent-up demand for housing.

"We're in a mini-boom," Abel says happily.

Growth Sans Government

Despite attention given to the capital move, Juneau has, for years, been on a mission to wean itself from government teat.

"State government is declining very slowly in its importance to the local economy, (while) the retail and service sectors are just busting at the seams," says Jim Calvin, senior analyst for the McDowell Group.

In 1985, state government accounted for one-third of all Juneau employment. Ten years later, Calvin says, that has been trimmed to one-fourth.

About half a million tourists, mostly from cruise ships, are expected to visit Juneau this year. Juneau is the fifth largest cruise ship destination in the world and the most popular port-of-call in Alaska, notes Murray Walsh, Juneau's director of community development.

Long an exporter of government and health care services, Juneau has seen its retail segment explode in the last few years, with the introduction of Costco, Kmart and Carrs, as well as two small shopping malls and a large Fred Meyer store.

The result is obvious at Juneau's ferry terminal, where overloaded pickup trucks stream back into Southeast's smaller towns and villages, filled with groceries, electronics and other goods. Walsh says he has been told that about a quarter of Costco's...