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351 



*" jsiTKA \ City and Borough of Sitka 



304 LAKE STREET. SITKA, ALASKA. 99835 



ANALYSIS OF IMPACTS AND POTENTIAL REPARATIONS DUE TO 

 ALASKA PULP CORPORATION CLOSURE 



Testimony before U.S. Senate Energy Subconaittee on Public Lands, 

 National Parks, and Forests Public Hearing in Sitka, Alaska, April 25, 1989 



by Stuart Denslow, City and Borough of Sitka Administrator 



Any meaningful discussion of proposed changes in Tongass timber management 

 must consider the devastating consequences to Sitka and Southeast Alaska if the 

 Alaska Pulp Corporation (APC) mill were to be forced out of business. To 

 assess the socioeconomic impacts and estimate the reparations necessary to 

 compensate for these losses, the City and Borough of Sitka contracted with the 

 Juneau-based consulting firm. The McDowell Group, to prepare an "Analysis of 

 Impacts and Potential Reparations Due To Alaska Pulp Corporation Closure," 

 completed April 15, 1989. 



The analysis was to include scenarios for reductions in APC operations, 

 but substantial reductions may not be economically feasible, and a 50 percent 

 reduction in log supply is more likely to result in full closure. Closure 

 would result in a loss of one-fourth of Sitka's economic base and would be felt 

 in every segment of Sitka's economy. The timing of these impacts would likely 

 be experienced within two years, with an initial period of outmigration and 

 economic recession followed by a prolonged period of personal and business 

 bankruptcies, collapse of the real estate market, business closures, reductions 



