363 



real estate losses would be $84 million. In the opinion of the study team, Sitka 

 real estate losses could well exceed the 40% simply because there will be no 

 market for the approximately 600 to 700 vacant housing units which will 

 result from APC closure. 



Commercial real estate in Juneau was not hit as hard because the oversupply 

 was not as extensive as in residential real estate and because value of 

 commercial real estate is arrived at differently than that of residential real 

 estate. Commercial values fell 5-10%, roughly in proportion to the economic 

 loss. Commercial real estate values are based on tiie net earnings retxirned to 

 the owner, rather than the actual value of construction or replacement. 



Therefore, when estimating the loss to Sitka, the economic health of the 

 business commimity will be the primary determinant of commercial real 

 estate values. For purposes of this analysis, commercial real estate values are 

 assumed to fall in proportion to the loss of gross business sales, -29%. This 

 converts into a loss of $16 milUon. 



Industrial real estate has been discussed in the previous section and will 

 experience an estimated loss of $59 million. In total, Sitka's real estate value 

 losses should total $171 million, assuming the 40% loss in residential real 

 estate is not conservative. Real Estate calculations are based on official FY 1988 

 Sitka City and Borough assessments. 



Summary of Impacts and Potential Reparations 



Due to 

 Alaska Pulp Corporation Closure 



Impact Loss 



Population 2,050 



School Enrollment 413 



Employment 944 



Payroll (millions) $28.7 



Gross Business Sales (millions) $37.4 



Selected Municipal Impacts (millions) $6.4 



Real Estate Values (millions) $170.8 



% of Sitka 

 Total 



24.1% 



24.1 



24.1 



28.5 



28.5 



32.7 



46.1 



