Wrangell is among the more pessimistic towns in this year’s annual business survey conducted of Southeast communities. About half of the 35 Wrangell business leaders who responded to the survey had a negative view of the town’s economic outlook, and almost one-third expected they would need to cut jobs this year.
None of that surprises Kate Thomas, the borough’s economic development director.
“Our downtown district is not doing as well as it has in the past,” she said in an interview Thursday, June 6. Residents are spending more money online and less locally, she said. The loss of several thousand potential cruise ship visitors this summer due to cancellations and a cruise line bankruptcy is adding to the gloomier business attitude.
“We have experienced some financial heartburn,” Thomas said.
She has been talking with business owners, and “Wrangell definitely has a more pessimistic outlook.”
The borough’s Economic Development Board reviewed the survey results at its June 6 meeting.
The April survey of 440 business owners and managers throughout Southeast, conducted annually for the Southeast Conference, found the most optimism in the popular cruise ship destinations of Ketchikan, Skagway and Hoonah.
Almost half of the Hoonah businesses that responded to the survey conducted by Juneau-based Rain Coast Data said they expect to add employees over the next 12 months.
Huna Totem Corp., the Native corporation for the community of about 900 people, 20 years ago developed a cruise ship destination at Icy Strait Point, near a restored century-old salmon cannery, about a mile north of the state ferry terminal. The first ship docked in 2004; several hundred thousand cruise passengers a year visit Hoonah, with a zipline, hiking trails, retail shops and other attractions at Icy Strait Point.
The loss of cruise ship passengers — and their spending — in Wrangell this summer will hit borough finances, too. Sales tax revenues go toward the schools and borough services. “There’s certainly some concern for us,” Borough Manager Mason Villarma said at an assembly work session June 5 on the budget for the fiscal year that starts July 1.
“Wrangell has not fully adopted or endorsed a cruise identity,” Thomas said.
Community surveys have indicated a strong preference to avoid attracting an overwhelming number of large ships and visitor traffic, with residents preferring to maintain a working waterfront rather than a tourist-dominated waterfront district.
But with possibly 25,000 cruise ship passengers this summer, Wrangell is far below the million-plus of Juneau, Ketchikan and Skagway, the half-million-plus of Sitka — even far less than the estimated 85,000 of Haines, which has about the same population as Wrangell.
Whether its visitors or new businesses, Wrangell needs to attract more outside money to town, Thomas explained. “It is important for us to be welcoming and warm to outside businesses.”
Investment from out of town can generate sales tax revenues, create jobs and put more children into the schools, she said.
New money, as it is called, also can help with community fundraising efforts, Thomas said. “Businesses (in town) aren’t doing that well,” with less ability to donate to community fundraising efforts. “We’re saturated,” she said.
The borough is stepping up its efforts to attract interest in the former 6-Mile mill property, which the municipality purchased in 2022 for $2.5 million. Thomas said it is a prime business opportunity waiting for an investor.
“Historically, Wrangell has relied on the state and federal governments” for grants, she said, emphasizing that the town needs to attract private investment to generate more economic activity.
Among the hurdles, however, is a dwindling supply of working-age residents as Wrangell grows older — the average age in town is 12 years older than the statewide average — and an inadequate supply of housing. Wrangell is not alone in Southeast with either problem.
Half of the people who responded to the Southeast Conference survey said recruiting and retaining new workers is critically important. “This is most strongly expressed by Juneau, Wrangell, Petersburg and Ketchikan business leaders, where three-fifths of respondents say the need to attract young professionals over the next five years is critical,” the Rain Coast Data report said.
Just as many said housing is among their biggest problems. “Southeast business leaders continue to identify housing as the top obstacle to economic development … with 61% of business leaders saying it is critically important to focus on housing over the next five years.”
Wrangell’s Economic Development Department said it plans to set up a series of focus group discussions to hear from businesses, intended to gain “a deeper understanding of the specific needs, challenges and opportunities … for developing effective strategies to support and accelerate business and industry growth.”
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