* Why do business in Anchorage?
* Anchorage Industries
* Anchorage Labor Market
* Office and Retail Space
* Downtown Anchorage Development
* Business Taxes
* Business Incentives
* Business Licensing
* FAQs

Why do business in Anchorage? 

Anchorage is primed to accommodate companies seeking to grow and expand their reach, particularly those with global interests. Anchorage offers ample space, infrastructure and business incentives. Coupled with the good fortune of an advantageous location, this makes Alaska ’s young, but sophisticated metropolis, an ideal location for conducting world commerce.

Anchorage is less than 9 1/2 hours by air from 95 percent of the industrialized world in Asia , Europe , and North America .  By looking at the globe from the top, it’s clear that Anchorage is truly the crossroads to the world.  The city’s strategic global location makes it ideal for international warehousing and distribution of high-value, time-sensitive products and parts because cargo departing from Anchorage arrives at its Asian or European destination at least two to five hours faster than freight from other U.S. West Coast cities.  Approximately 70 percent of all Asia-Europe air cargo and 95 percent of all North America-Asia air cargo stops in Anchorage . The availability of international cargo uplift in Anchorage makes the city an ideal location as a major distribution hub or area for consolidation of inventory.

While the Ted Stevens Anchorage International Airport is the major gateway to the state and a key sector in Alaska ’s transportation industry, businesses also capitalize on the links to the rest of the world provided by the Alaska Railroad, the Alaska Highway , and the Port of Anchorage .

For companies importing component parts, foreign trade zones exist in the city at the port and the airport.  Zones allow for warehousing, inspection, display and repackaging of goods without duty payments until formal entry into the U.S.

As Alaska ’s primary transportation, communications, trade, service and finance center, Anchorage is tied to national and international markets for oil, gas, and mining. The flow of tourists and air cargo also weigh heavily on the city’s economic performance and development. While the state’s capitol is located in Juneau , Anchorage is the state’s government center with 9,600 state employees and 9,700 federal employees in 2002. 

Oil, Gas and Mining

The sum of exploration and development investment in Alaska and value of minerals produced exceeded $1 billion in 1998.  Some Alaska businesses mine for zinc, gold, silver, lead and copper, from the Red Dog Mine near Kotzebue, the Green’s Creek Mine near Juneau, and Fort Knox Mine near Fairbanks.  Smaller mines located throughout the state produce coal and calcium carbonate. Alaska contains half the U.S. coal reserves and is home to the nation’s largest silver and zinc mines. 

Oil production from Alaska accounts for more than 17 percent of all oil produced in the United States . It is the major source of income for the state, funding a major percentage of the state’s budget, and creating 30 percent of Alaskan’s personal income.  In 2002, the oil and gas industry in Alaska employed nearly 8,900 people. The state rates second in daily oil production behind only Texas .

More than a dozen fields currently produce oil on Alaska ’s North Slope . Once captured, the oil travels 800 miles from Prudhoe Bay to Valdez via the Trans Alaska Pipeline System.

A gas liquefaction plant in Nikiski, the only one of its kind in North America , supplies 1.3 million barrels of liquefied natural gas to Japan each month.

Air Cargo/Global Logistics

The Ted Stevens Anchorage International Airport has the distinction of being the preeminent international cargo crossroads for global freighter activity. Federal Express, United Parcel Service, Northwest Airlines and the U.S. Postal Service have established international cargo sorting and distribution hubs in Anchorage because of the city’s central location to world markets, expedited customs clearance, low landing fees, low fuel flowage fees and accessibility of customs agents in dedicated Foreign Trade Zones.

In 2001 the amount of air cargo landed at Ted Stevens Anchorage International Airport exceeded 1.7 million tons. In comparison, the Federal Express Headquarters in Memphis , Tennessee , landed only 1.3 million tons in 2000. 

Tourism/Conventions

The visitor industry is Alaska ’s second-largest private-sector employer, accounting for one in eight private-sector jobs. It is Alaska ’s fastest growing industry.

Visitors spend on average, nearly $1 billion in Alaska annually, or about $1,100 each (State of Alaska ).  As a result, more than $120 million is directly injected into state and local treasuries in the form of taxes, fees and other assessments.

While the majority of Alaska visitors come for pleasure or to visit family and friends, a significant number come for business and conventions. In 2001, the Anchorage Convention and Visitors Bureau helped bring conventions, trade shows and meetings to Anchorage , with an estimated economic impact of $81 million.  The majority of those conventions were held during the fall, winter and spring.

Military

Anchorage ’s military contributes a significant amount of dollars to the state’s economy through Fort Richardson Army Post and Elmendorf Air Force Base. More than $400 million in direct payroll expenses were recorded in FY00.  Ted Stevens Anchorage International Airport is home to a unit of the Air National Guard.

Anchorage residents are proud to host the local military personnel. Both active and inactive members enjoy great community support from the local merchants who depend on the military population for a large part of their sales and also for hire. Alaska ’s geographic location contributes to rapid deployment of troops and material anywhere in the world as it is only nine hours within most of the world’s current hot spots.

Alaska provides the military diverse training grounds that include glaciers, coastal areas, oil fields, parks and seaports.  Nearly 2 million acres of military managed training area is available including 64,000 sq. mi. of military air space for year round flight training to and around troop maneuver and impact areas.  Due to the location of Elmendorf Air Force Base and Ft. Richardson Army Post, joint training is a reality every day.

Military forced stationed in Alaska have access to hundreds of miles of contiguous training area, including room to live fire all conventional weapon systems in the U.S. Arsenal.

Ted Stevens Anchorage International Airport and the Port of Anchorage provide the logistical infrastructure for businesses that support the military.

Technology

Alaska is well connected technologically and is primed for the expanding world of electronic commerce. In the late 1990s, two new high-bandwidth fiber-optic cables were installed between Alaska and the continental U.S. , increasing capabilities of computer networks statewide.  Most Anchorage buildings offer high-speed broadband Internet access and redundant fiber optic cables allow access to work anywhere in the world.   

Telecommunications

Alaska is one of the most “wired” states, consistently ranked in the top five states per capita for Internet usage.  As Anchorage is the center of the telecommunications industry in the state, it is home to two local phone companies, Alaska Communications Systems (ACS) and General Communication, Inc. (GCI), both of which offer local and long distance telephone service, dial up and broadband Internet access and wireless service. In addition to the two local carriers, consumers have numerous options for Internet and cellular services. Satellite and cable television are also available.

Anchorage is connected to the rest of the world with redundant OC-192 fiber optic cables. AT&T Alascom operates a satellite-based system that functions as a backup to the land cables. For those looking to do business in the state, the two cables have the capacity for users interested in transmitting large quantities of data – server farms or customer service call centers.

Anchorage Labor Market

Anchorage ’s labor force is head and shoulders above the rest of the nation. Its relatively young workers are highly educated and career oriented. According to the 2000 census, the median age in Anchorage was 32.4, compared to a U.S. average of 35.3. Anchorage has a steady year-round employment base with a summer boost from tourism, fishing and construction activities.

Approximately 65 percent of all adult residents have completed a minimum of one to three years of college, placing Anchorage among the top metropolitan areas in educational attainment. 

Anchorage ’s job profile largely resembles that of the nation except that it has fewer manufacturing workers, less than 2 percent versus 15 percent nationwide.

In May 2002, there were 8.35 million square feet of industrial space in Anchorage .  Of this, 31 percent was Class I space, 42 percent was Class II space, and 22 percent was rated Class III space.  Vacancy rates ranged from 1.94 percent for Class 1 space, 6.84 percent for Class II space and 6.12 percent for Class III space.  In spring 2002 warehouse rents generally ranged from sixty-cents per square foot per month to $1 per square foot per month. 

Anchorage also has a number of building sites ranging in size from .5 to 200 acres.  For the first time, a public/private partnership is being formed to address the need for more fully developed industrial park land.

Since real estate is always a moving target, business professionals should contact one of the Anchorage Chamber’s real estate brokers or the Anchorage Economic Development Corporation before purchasing space or structure in the city.

A strong downtown is an important indicator of any community’s economic vitality. Throughout the past few years, Anchorage has taken a number of steps to bolster and improve its downtown areas.

Downtown Anchorage experienced a renaissance in the 1990s. A major catalyst was the development of Town Square Park , located between the Performing Arts Center (PAC), City Hall and the Egan Civic and Convention Center. Extensive landscaping transformed the square into a public plaza with a waterfall fountain, spectacular flowerbeds in the summer and lighted trees via the Anchorage Chamber’s City of Lights program in the winter.

A Municipal beautification program including flowers, benches, new streetlights and road design improvements have greatly improved the attractiveness of the downtown area.  More than a vital business hub for Anchorage , downtown is the heart of the city for entertainment, dining, shopping, culture and the arts. 

The Anchorage Downtown Partnership is a young organization that has merged with the Downtown Anchorage Association yielding a 30-year history.  The organization is dedicated to providing supplemental Clean and Safe services and contributing to the vitality of the city through increased cleanliness, occupancy rates, investment values and increased income. 

Alaska Corporate Income Tax— Alaska ’s corporate net income tax is similar in structure to the federal income tax. It is a graduated percentage of taxable income ranging from 1 percent for net income below $10,000 to 9.4 percent for net income above $90,000.   

Property Taxes— Anchorage ’s property taxes are based on real and personal property, and are levied on a full-assessed value at mill rates that ranged from 9.37 to 17.17 mills in 2002. In comparison, Anchorage ’s average mill rates are lower than Seattle ’s by approximately 4 mills.

Inventory Taxes – Inventory is taxed as personal property based upon 100 percent of the value of inventory.  Inventory held for shipment outside of Alaska may be exempted from local inventory taxes.

Economic Development Incentive—The Alaska New Bu siness Incentive Program is an economic development grant program targeted at companies locating or expanding into new manufacturing or value-added business in Alaska . The program is focused on attracting substantial businesses that will create high-value, year-round jobs. “New business” refers to industries and operations that are new to Alaska , as opposed to “start-up” businesses.   

Property Tax Abatement—The Anchorage Municipal Code provides for tax exemptions pertaining to property and inventory for economic development. New or expanding businesses meeting certain criteria may be granted a property a tax abatement.

Targeted Jobs Tax Credits—A federal tax credit program that encourages employers to hire new employees from targeted groups. An employer can claim 40 percent of up to $6,000 of an employee’s first year’s wages for a maximum tax credit of $2,400.

For additional information about business incentive programs, please contact:  Anchorage Economic Development Corporation, 900 W 5th Avenue Ste. 300 , Anchorage , AK   99501 by phone at (907) 258-3700 or online at www.aedcweb.com.   

Throughout the past low taxes and attractive business incentives have contributed to the growth and diversification of Anchorage’s economy. 

In October 1999, three key rating agencies reflected confidence in the city and its growth by assigning superior Municipality bond ratings.  Moody’s raised the rating of Anchorage General Obligation Bonds from A1 to Aa3, and Standard & Poor’s assigned an AA rating to Anchorage ’s general obligation school bonds series 1999B. 

Everyone including sole proprietors, partnerships and corporations, engaging in a business activity in Alaska must hold a business license for that activity.  Currently there are approximately 76,000 Alaska business licenses.  Businesses that sell tobacco products must also have a tobacco endorsement on their license ($25 per endorsement).

A business license is valid for two years, the current year in which the license is granted plus all of the next calendar year. All business licenses expire on December 31 of the second year. The cost is $50 per license.

Professional or occupational licenses are required in addition to business licenses for many activities. Attorneys, motor vehicle dealers, health care professionals, construction contractors and numerous other professionals are required to hold a current professional or occupational license. Those licenses must be obtained before a business license will be issued.

For more information about obtaining an Alaska business license, call the Division of Occupational Licensing at (907) 269-8160 or visit www.dced.state.ak.us/occ.

An additional license is required for some businesses that operate in Anchorage . Applications and specific information can be obtained at the Clerk’s office at (907) 343-4311. For a list of businesses requiring municipal permits and licenses, visit www.muni.org/Services/Permits/index.html.

Frequently Asked Questions and Answers

Visit the Small Business Administration's Web site for the most up-to-date questions and answers.