Report: How to successfully grow a port

MAT-SU -- A solid strategic business plan and a strong executive director may be key components to getting Port MacKenzie off the ground, according to a recent report.

Two executives from Fairfax, Va.-based Cornell Group Inc., a consulting company that has helped around 50 ports worldwide get off the ground, met with Mat-Su Borough and Port Commission officials Tuesday to discuss steps that should take place to help Port MacKenzie become a viable, successful venture.

The first step, said Robert Goethe, regional director for the company, to successfully developing the port would be a strategic business plan.

"A strategic vision and business plan," Goethe said, "is the biggest part of all the planning processes."

Goethe added that the port commission and the assembly need to look at the larger picture when they work through the planning steps for port development.

"A port should not be looked upon as a local entity," Goethe said. "It is a statewide entity."

Goethe said that in the chicken-and-egg debate between industry and ports, the port is the "egg" from which industry springs, although it works in reverse as well.

"A port creates industry and industry creates a port," Goethe said.

Goethe recommended the borough review its options to know the most viable directions the port could head, then accept only those businesses and industries that fit into the plan.

It was also important, Goethe said, to solicit private partners with very detailed requests for proposals, lining out exactly what would be expected in terms of reporting requirements. In governmental partnerships, Goethe said, it's common for businesses to have to submit cash flow statements and other financial documents to demonstrate a proven ability to produce profit.

But what if those companies request to keep financial information confidential, borough manager John Duffy inquired -- a situation that presented itself in dealings with Hatcher Pass Development Corp., when, after an appraisal of the company was completed, corporation principal Greg Romack requested that the information remain confidential.

"You don't deal with them," was Goethe's quick answer.

"It's not standard practice," said Cornell executive vice president Pamy Arora. "Why would they not want to disclose information? That's a red flag."

In order to understand the best direction to take the port, Goethe suggested a close review of existing studies related to potential businesses that could fit into the port area. He also added that finding a political consensus would help further port development -- an idea that several on the two bodies found laughable, given the political divide in borough government.

Once the market analysis and strategic business plan are performed, the next big step in making the port successful, Goethe said, is making it a separate entity from the government, similar to how the Alaska Railroad Corp. operates in conjunction with the state, and getting a highly trained professional to serve as the port director. It was very important, Goethe said, that the director be hired by a port operating board -- not politically appointed.

"Please, don't ever let the executive director be a political appointee," Goethe said. Doing so could make the success of the port dependent on the political whims of each incoming assembly.

To ensure the success of the port, Goethe suggested the borough look at past political figures in Alaska's history.

"Something that would be very, very helpful to the project is [to hire as executive director] a person of influence in the state," Goethe said. Such a person, he said, could speak well with those in power and know how to sell a project.

A successful port, Goethe said, required another critical element, and that is an operating board. He said typical port boards are made up of five to seven people, and the most successful ones are those that do not grow stagnant.

"The people are appointed to be successful, to be profitable," Goethe said. "And if they aren't, they are replaced."

And again, Goethe said, political consensus is a necessity.

Goethe said part of the solution to developing consensus is to help people -- including other governmental bodies -- understand the potential revenue and jobs that can be brought in by a port.

The important question, Goethe said, is how much revenue would be brought into the state as a result of the port. The answer to that question, he said, should be put before the state so it can understand the value of the project and assist in construction of infrastructure.

"This is the greatest selling tool that you're ever going to have for a port," Goethe said.

It's also a tool that should be used to bring about as much political consensus as is available in the community, he said.

"That will sell the port above everything else," Goethe said. "It will get people on your side when they were against you."

Above all, Goethe said, the borough needs to consider the planning that needs to be done to get the port moving in the right direction. Without planning and evidence of how the port will actually perform in the local economy, the port will never get off the ground.

"You need people to be of one voice," Goethe said. "That program has to be built before you start spending big-time dollars."