A life spent in construction
Messy desk … creative genius.
© Chris Arend Photography
Small models of bulldozers, excavators, backhoes, cement mixers, dump trucks, and other construction equipment line the windowsills of John MacKinnon’s office at Associated General Contractors (AGC) in Anchorage. Mistaking them for “toys” elicits a swift correction from him. “They are die-cast steel models and built to scale.” MacKinnon should know; those models are emblematic of a life spent in construction.
MacKinnon, sixty-two, has had a long and interesting career. He was a deputy commissioner of the Alaska Department of Transportation & Public Facilities (DOT&PF) and owner of a contracting business, RMC, Inc. in Juneau for twenty-four years. He served twelve years on the Juneau Assembly and five as deputy mayor and as interim city manager for one. He is one of the seven Denali Commissioners and sits on the boards of the Resource Development Council and Arctic Power. He is also on AGC’s Construction Education Foundation and the Alaska Emerging Energy Technology Fund Advisory Council.
In 2008 MacKinnon became executive director of the Alaska chapter of the national Associated General Contractors of America. His working life has been mostly in construction, except for two government jobs. “Construction might have been in my genes. It is mentally rewarding and best of all you are not just sitting around, going to meetings, or shuffling papers. You see immediate results of your work,” MacKinnon says.
That love of construction started early. “John always liked building things. He spent a lot of time in our basement workshop and built forts in the trees in our yard,” his mother Jane MacKinnon says. A neighborhood girl even left notes for MacKinnon in one of his forts. “Every once in a while we’d see John tearing up those notes. He didn’t like it and she probably got tired of climbing up the tree and soon gave up,” his mother says.
Deep Alaska Roots
Born and raised in Juneau, MacKinnon has an older brother and sister. He comes from an old family that has lived in Juneau since 1884. His father ran Alaska Laundry Cleaners, a family business incorporated in 1895, which is Alaska’s oldest business under the same ownership. His mother took care of the family.
The late 1960s were times of anti-war protests and upheavals for young people in the Lower 48, but life in Juneau followed the same old routines. For MacKinnon it meant going duck hunting before school with his long-time friend Joe Smith. He would often store his shotgun and hunting gear in his school locker, something that would never happen today.
He was a good student, known for his intelligence, wit, creativity, and love of adventure, according to Ken Koelsch, one of MacKinnon’s high school teachers. Koelsch credited MacKinnon’s resourcefulness and ability to carry out a task. “I was directing a school play and I needed to get the publicity out. So I bet John that if I gave him two hundred posters he couldn’t get more than fifty up.”
Koelsch was wrong. All two hundred posters went up—plastered in the windows of downtown Juneau businesses. “I later drove downtown and, much to my chagrin, saw the posters in the windows of all the bars,” Koelsch says. The publicity paid off; the play was one of the best attended in years.
There were lighter moments in MacKinnon’s younger years. Once he talked his friend Joe Smith into helping him make wine from a gallon of Welch’s grape juice. They celebrated the Class of 1970 by painting a big “70” on a rock outcropping on the mountain above Juneau. The painting caper went well, the wine one did not. He bottled the wine before the juice was fully fermented. All the bottles exploded. He was left with only a big mess to clean up.
John MacKinnon is the voice of the construction industry in Alaska.
© Chris Arend Photography
After graduating from high school in 1970, MacKinnon attended Western Washington University in Bellingham. Rather than engineering or a construction-related field, he chose a biology major. “I intended to go to medical school,” he says.
He graduated with a BS in biology in 1976, but the idea of becoming a doctor had lost its appeal—MacKinnon had discovered scuba diving and became interested in marine biology. He returned to Juneau and got a job as a biologist at the Auke Bay Laboratories in Juneau.
He lasted two years there. “I found the bureaucracy limiting. We need order and a certain amount of process and procedure that bureaucracy provides, but I found that bureaucrats were trained to say ‘No’ rather than working to find solutions.”
In 1978 he and two other partners started RMC, Inc., a construction firm. The company handled mainly commercial jobs such as office buildings, parking garages, and building improvements.
The construction company allowed MacKinnon to show his innovative or creative side, according to Joe Smith, his childhood friend and a Juneau contractor. “John has a mind like a steel trap and he came up with some amazing creative solutions for tackling a job.”
One job at the Juneau municipal pool involved work on the building structure over the pool. The original plans called for draining the pool and scaffolding the entire area to do the work, Smith says. “John found another way. He used long trusses that spanned the width of the pool and put them on casters. He built a platform on the trusses so his workers traveled back and forth the length of the pool as they worked. It was a brilliant stroke and the job went fabulously for him,” Smith says.
In addition to running a successful contracting business, MacKinnon also found time to give back to his community. A strong sense of civic duty led him to local politics.
From 1983 until 2001 he served on various local boards and commissions, including the municipal Design Review Board, the Planning Commission, and the Juneau Assembly.
In a small town like Juneau, politics often take a back seat to friendships such as the one MacKinnon, a Republican, formed with Senator Dennis Egan, a Democrat. Friends from an early age, they even have special sobriquets for each other: “John calls me ‘Dummy,’ and I call him ‘Stupid,’” Egan says.
When the two friends ran for seats on the Juneau Assembly they campaigned together. “We both won and when I became mayor in 1995 I appointed John as my deputy,” Egan says.
During those years, the mayor and deputy mayor “were ‘peas in a pod’ and worked together well,” according to Koelsch, who was elected to Juneau’s assembly in 1997. “John would make sure that when he and Dennis had a big issue they knew where the votes were. He was a good tactician but was happy to stay in the background.”
When disagreements arose between the two they managed to find a resolution. The two men occasionally had different opinions about development. MacKinnon was, and is, pro-development and sometimes issues, such as the Juneau wetlands management plan, would separate them. “But we managed to reach a consensus and the issues got resolved,” Egan recalls.
The years in local politics honed MacKinnon’s skills in dealing successfully with a variety of issues. Paulette Simpson, a longtime Juneau resident who follows the local political scene, observed MacKinnon on the assembly. “He was one of the most skillful and conscientious assembly members. He moved issues along to a successful conclusion and usually came very close to satisfying all sides,” she says.
Simpson also noticed that MacKinnon “came across as a regular guy at the meetings who dressed in regular clothes, and that was kind of disarming because a lot of people thought, ‘Oh, he is just a builder,’ but he was wicked smart and articulate, and had a good knowledge about a lot of issues.”
MacKinnon faced a term limit after his fourth term on the Juneau Assembly, and he was also getting weary of his business and the copious paperwork he had to file. “The business stopped being fun, and in 2001 when I got off the assembly, I sold the business and retired.”
His attempt to retire failed when he was asked to serve as Juneau’s Interim City Manager in 2002. He served ten months and then began his second government position in 2003, when former Governor Frank Murkowski asked him to serve as DOT&PF’s deputy commissioner for highways and public facilities.
The political acumen acquired from his years on the Juneau Assembly made the transition to DOT&PF easy for MacKinnon.
MacKinnon arrived at DOT&PF seasoned in politics and familiar with the workings of government. His experience in construction helped him “to get along well with the rank and file because he was basically a contractor and not a ‘suit,’” Simpson says.
In his five years with DOT&PF MacKinnon was involved in several significant projects including upgrades to the Dalton Highway, solutions to Anchorage’s road congestion, and the early phases of the Knik Arm Bridge. He was also responsible for all of DOT&PF’s administration and finances and, most importantly, getting legislative approval of the agency’s budget, which required building a good relationship with the Legislature. “I spent a lot of time in the Capitol, and I worked hard to build the trust to get our budget passed,” he says.
Frank Richards, who was in-charge of maintenance operations at DOT&PF at the time and is now vice president for engineering and project management at the Alaska Gasline Development Corporation, says MacKinnon understood the political process well, had a lot of friends, and knew to how work through the political arena.
Richards singled out the Knik Arm Bridge as a project that MacKinnon worked to keep viable. “He worked it through the AMATS process [a state, local, and municipal transportation coordination group] with the Municipality of Anchorage. The bridge was politically charged and it had to work its way through the federal, state, and municipal processes. There were a lot of folks who didn’t necessarily agree with the project proceeding.”
In fact, the opponents of the bridge pushed to have the project taken off the AMATS priority list, which would have signaled a lack of municipal support that would have been a death knell at that early stage. MacKinnon helped get that turned around so that the bridge remained among Anchorage’s priorities, Richards says.
AGC of Alaska Executive Director John MacKinnon spreads the word.
© Chris Arend Photography
Public Service with the Private Sector
In December 2006 MacKinnon became DOT&PF acting commissioner in Sarah Palin’s administration but eventually left the agency, and his departure coincided with the Alaska General Contractors of Alaska’s search for a new executive director. The construction community knew about MacKinnon and his efforts to improve the relationship between the agency and contractors.
MacKinnon remembers those DOT&PF days well. “I was still new at DOT when I heard some in the department say, ‘To hell with the contractors.’ After hearing that a couple of times I said, ‘Time out,’ that’s not what our attitude needs to be. We need the contractors. We don’t have a construction program without them, and they don’t have a lot of work without us.
“As a former contractor, I knew of problems between the department and the construction industry so I worked hard to smooth those out and things began to improve,” MacKinnon says.
The construction background, skills as a successful negotiator, and knowledge of the Legislature and administration made MacKinnon an attractive candidate. AGC hired him in 2008.
Since then MacKinnon has continued to improve the working relationship between DOT&PF and the construction industry. “At AGC we have a steering committee of a half dozen contractors that meet regularly with DOT[&PF] staff,” he says. AGC now receives information from DOT&PF for input, sends back its comments, and then the two groups meet to resolve differences.
Compared with the often-rancorous relationships between DOT&PF and contractors in other states, the one in Alaska is very good. “The nice thing about our relationship is that we don’t always agree, but we work together. Sometimes we can present a convincing argument and DOT[&PF] agrees, and sometimes we can’t. But we are able to work together and discuss the issues,” says MacKinnon.
One of MacKinnon’s main tasks is keeping track of issues and legislation that affect the economy and the construction industry. AGC’s members total about 650 businesses, half contractors and half associate members such as architects, engineers, building supply companies, and financial firms.
“We advocate for the construction industry and, where necessary, get legislation introduced to resolve an issue.”
One example is a recent change the AGC helped accomplish to solve a problem with the state mining license tax, an antiquated tax first enacted by Alaska’s Territorial Legislature in 1913. Tony Johansen, co-owner of the Fairbanks construction company Great Northwest, Inc. that also mines gravel, found the tax difficult to work with as it applied to gravel mining and asked MacKinnon for help.
Sand and gravel operators found the mining tax burdensome because it treated their operations as if they were mining more valuable commodities such as gold or silver, MacKinnon says. The Department of Revenue collected the tax but its audits became a very expensive process for all involved. Johansen contacted AGC in 2011 after discovering that his company had spent almost $20,000 in staff and accounting time for an audit on a $7,500 tax bill.
“Once I got hold of John and expressed my concerns he contacted other gravel operators throughout the state. He discussed the problem with the revenue department and they looked into the tax,” Johansen says. The department figured out that in the last five years it had collected between $206,000 and $320,000 annually in revenue on sand and gravel but had spent about $150,000 each year to administer that tax, and those were just the state’s expenses.
“John got a bill, HB298, introduced in the 2012 session to exempt sand and gravel from the tax and worked diligently throughout the legislative process. The bill passed and that was a big help to our industry,” Johansen says. Since the bill’s passage, sand and gravel operators and the construction industry have saved about $1 million a year, according to MacKinnon.
AGC is not all about contractors; it also reaches out to the community to train Alaska’s future construction workers. AGC’s Construction Education Foundation has had training programs for the last ten years, using grants from the state and federal governments to operate the Alaska Construction Academies in Alaska. AGC works with training programs in over ten urban and rural communities from Kotzebue to Ketchikan.
The construction academies also reach out to students from primary to secondary school. “With secondary and middle school students we try to build their interest in construction as a career. We introduce them to the basics and tell them about careers in plumbing, electrical, carpentry, road building, and heavy equipment operation,” MacKinnon says. Elementary school children learn about construction through AGC’s “Buildup” program, where tool kits are taken into classrooms for children to become familiar with tools.
Beyond schools, AGC offers training programs to adults. Students receive credentials in those courses, using the nationally recognized NCCER (The National Center for Construction Education and Research) training curriculum. That provides participants credentials that are recognized all over. “If you have taken the basic core of NCCER you can get credit towards your apprenticeship hours, so it is a very helpful thing,” MacKinnon says.
Outside AGC, MacKinnon lends his expertise to the Denali Commission, which was created by the late Senator Ted Stevens to build and upgrade power generation, communication systems, and water and sewer and other infrastructure in rural Alaska.
MacKinnon lauds the commission’s work but also voices concern. “The Denali Commission has accomplished a tremendous good in rural Alaska with the services it has delivered. But as federal funding decreased, Commission costs became a much greater percentage of the program,” he says. That makes the commission less efficient than in past years.
Even with declining oil prices and the looming state budget deficits, MacKinnon is optimistic about Alaska and the construction industry’s future. Compared to 1986, he believes that Alaska’s economy is mature and more diversified and will survive this latest downturn.
Despite the current financial uncertainties, the construction industry spending has not decreased significantly. The AGC/ISER 2015 Alaska construction forecast showed total construction spending down by only 3 percent to $8.5 billion from the nearly $9.2 billion forecast in 2014.
The annual forecasts started in 2004 and are prepared by UAA’s Institute of Social and Economic Research for AGC’s Construction Industry Progress Fund. Except for three years of no growth when the rest of the country was in a deep recession, every year has seen an increase in construction spending, which soared up to 18 percent in 2014.
The construction industry will feel the downturn but not immediately because of the lag between when public money was appropriated and when contractors start the projects. Appropriations from previous bonds issued and capital budgets will help soften the blow, MacKinnon says.
What concerns MacKinnon more is the possible cancellation of large, strategic projects such as Susitna-Watana hydroelectric dam, the Knik Arm Bridge, and the Juneau Access road. “They are an investment in Alaska’s future and should not be cancelled,” he says.
He personally supports a state income tax to help offset reduced oil revenues, MacKinnon says. “We need to pay more for what we are getting; we need more skin in the game to appreciate what we have,” he says.
When questioned about what he does for fun, MacKinnon looks askance. “Fun? Work is fun.” Although he finds joy and fun in work, it isn’t all work. He enjoys spending time with and cooking for his new bride, state Senator Anna MacKinnon (formerly Anna Fairclough), visiting his three children and two grandchildren who live in the Lower 48, and taking on construction projects for his daughter in Portland. He tries to spend time at his cabin in Southeast Alaska, where he fishes in the summer and hunts deer in the fall.
There are no immediate plans to retire again. MacKinnon finds pleasure in what he likes best—giving back to his industry and to his state.
Writer Shehla Anjum is based in Anchorage.
This article originally appeared in the April 2015 print edition of Alaska Business Monthly.