What a difference a decade makes.

• Author: Jones, Patricia
• Position: Economic recovery in Fairbanks, AK

In 1987 Fairbanks hit the bottom of the economic barrel. Banks were closing, people were leaving town - and their mortgages - in the middle of the night. Now it seems Fairbanks is where it's at in Alaska.

Ten years ago, Fairbanks suffered from the post-pipeline construction era-banks were closing, people were walking away from $100,000 homes because they couldn't make monthly mortgage payments, and a gloomy job market forced many to leave the area in search of work. Interior Alaska's largest community, the second-largest city in the state, was in a world of hurt.

Denali State Bank survived the crash, thanks mostly to timing, unlike a half-dozen banks and credit unions that closed in the mid 1980s, according to Gary Roth, president of Denali State Bank.

"We were lucky, because we opened just before that period of time that the economy made such a turning point," Roth said. "We did not have a portfolio of bad loans that we had to deal with. Instead, we entered the market with a clean slate.

Bill Robertson, now president and chief executive officer of the Greater Fairbanks Chamber of Commerce, remembers skyrocketing interest rates and hundreds of home foreclosures during that troubled time 10 years ago.

"Interest rates were 14 and 15 percent, and people could not sell what they had and couldn't make payments," Robertson said. "Many people were just walking away from properties. That's all they could do."

Many people, unable to find jobs locally, left Fairbanks for other employment opportunities. For some, it was only a 350-mile drive to Anchorage, said Dan Simien, president of the Laborers Local 942 headquartered in Fairbanks.

"When they moved into maintenance of the pipeline system, maintenance work was given to non-union contractors with headquarters in Anchorage," Simien said. "The next thing we knew, Outsiders were getting those jobs and flying right over Fairbanks directly to the North Slope."

But now the economic picture in Fairbanks is much different. It's stable. It's prospering. More importantly, it's growing and diversifying, an amazing success story considering the town's economic history and recent crash just 10 years ago.

"This is our opportunity to do it right," Robertson said. "The growth is not as dramatic as during pipeline years, but this is healthy."

There is a difference this time, he and others point out. For starters, the economic turn-around hasn't happened overnight. And it's caused by growth in a number of natural resource industries. Oil is just one of the players this time around.

Large-scale construction projects have helped drop unemployment rates to some of the lowest reported by state labor analysts in recent years for the Fairbanks North Star Borough. During the first summer of construction at the Fort Knox gold mine, local unemployment hit 5 percent in August 1995. That was the lowest level of unemployment for the Fairbanks area since 1978, according to John Boucher, a state Labor Department economist.

And 1995 was the first year the FNSB recorded year-round, single-digit unemployment, even during the long winter that typically results in construction and tourism-related layoffs. January 1996's unemployment of 10.1 percent kept the same record from being met again.

"Construction at the Healy Clean Coal Project and Fort Knox filled a tremendous gap for us last year," said Simien, who's mission in the Laborers is to find work for 1,200 members.

"When I first saw that boom and bust, I was amazed at the boom, but didn't expect the bust," he said. "People who have been here a lot longer than I say that's the cycle in Alaska tremendous growth, then it bellies out."

This time around, though, most say Fairbanks isn't headed into another boom cycle. Recent developments such as the Fort Knox gold mine and the Healy Clean Coal Project are not enough to create the frenzy that starting construction of the trans-Alaska pipeline did 23 years ago. Unlike temporary pipeline construction jobs, the two recent project have helped grow the basic economic infrastructure by adding nearly 300 new long-term, year-round jobs to the work force.

At Fort Knox, the permanent work force has taken over the mammoth-sized mine and mill, churning through an average of 31,000 tons of ore per day in recent months. Fort Knox employs about 250 people, and the mine's managers tout a local hire rate of more than 90 percent.

Construction on the 50-megawatt, coal-fired power plant in Healy will taper down this year from the peak last summer and fall of nearly 300 workers, a number of those from the Fairbanks area. Usibelli Coal Mine is expected to add some new workers to help supply coal for the new power plant, and Golden Valley Electric Association plans to hire about 15 additional employees to run the experimental power plant.

Tourism continues to grow locally, particularly during the sunny springtime when excellent Interior snow conditions can be enjoyed during moderate temperatures and long days with little or no wind. "It's not just one single thing but a whole continued schedule of things going on that cause people to come up here for winter vacations," Robertson said.

And recent announcements of new oil field discoveries, the industry that created the boom of two decades ago in this Interior city, are always welcome news to resource - development advocates. "We hope to see construction jobs on the North Slope every time there is an oil discovery there," Simien said. "If there is a viable resource to develop, it will increase the jobs here in Fairbanks."

Alyeska Pipeline Service Co.'s plan to reorganize the company and eliminate as many as 500 jobs statewide doesn't strike fear in the hearts of Fairbanks-area businesses, either. That's because the company plans to move all but 125 corporate workers closer to the pipeline operation, which means about 300 well-paid Alyeska employees will be working in a new Fairbanks office. Local real estate agents and home builders, some of the first to hear the...