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Eklutna, Granite Move Epic Volume of Gravel

Making way for Birchwood Industrial Park


Loading the gravel train at the Eklutna Granite site near Birchwood.

Photo courtesy of Granite Construction Co. Inc.

The Dena’ina people are quiet by nature, says Curtis McQueen, chief executive of Eklutna Inc. But Eklutna’s shareholders and managers are planning to make plenty of noise about an emerging new project, the Birchwood Industrial Park.

It’s a concept that’s been moving toward its debut for several years and is expected to fill a critical need for the greater Anchorage area. The need is land—ready industrial land—something in very short supply.

“There’s virtually no industrial land of this size in Anchorage,” McQueen says.

The project is in the Birchwood community north of the city, situated strategically between the Alaska Railroad and the Glenn Highway. The state-owned Birchwood Airport is adjacent to the site.

To pursue the project, Eklutna assembled what has proven to be an effective partnership involving Granite Construction Inc., Cook Inlet Region Inc. and the railroad. What the partnership has achieved so far is impressive.


Multiple Assets

If you had flown over the site in 2008 and looked down, you would have seen a gentle slope covered with trees. Beneath the trees was a thick gravel bed, deposited long ago by glacial action. One might have reasonably thought, on first impression, that the site wasn’t suitable for development with all that rock in the way.

But Eklutna and its partners saw it differently. In fact, the gravel is proving a valuable asset, helping to pay the cost of developing a “nice and flat” 130-acre industrial space in a great location along one of Alaska’s most important transportation corridors, McQueen says.

A Herculean gravel extraction campaign is expected to wrap up this summer—and Eklutna is gearing up to market the tract to potential tenants.

When it comes to land, Eklutna is a go-to player locally. It’s the largest private landowner in Anchorage with 90,000 acres within the municipality, including Eagle River, Birchwood, Chugiak, Peters Creek and Eklutna.

Eklutna is one of the many Native village corporations formed under the Alaska Native Land Claims Settlement Act of 1971. Incorporated in 1972, Eklutna today has 178 shareholders.

The Birchwood site is actually a split estate. Eklutna owns the surface, while CIRI owns the subsurface, including the gravel.

In 2009, Eklutna, CIRI and Wilder Construction, then a subsidiary of Granite, signed agreements to mine the Birchwood gravel with an eye toward preparing the site as an industrial park.


Granite’s heavy equipment fleet, lined up, ready to work.

Photo courtesy of Granite Construction Co. Inc.


Granite built a railroad siding for transporting gravel as well as materials and equipment.

Photo courtesy of Granite Construction Co. Inc.


Successful Partnership

In Granite, Eklutna found a partner with the brawn and know-how to efficiently remove the immense volume of rock on the site. Further, the company really knew the aggregate business and all the products that could be made from the raw gravel.

Based in Watsonville, Calif., and publicly traded on the New York Stock Exchange, Granite has operated other gravel pits in Alaska, including at Chugiak and Palmer.

For the Birchwood site, the plan was to mine the gravel and load it by conveyor onto trains for transport south into Anchorage.

Right out of the ground, the Birchwood gravel doesn’t look like the crusher-run stuff you might see in a driveway. It’s more like cobblestones of all sizes plus sand.

The mining and hauling has proceeded smoothly each summer since 2009, and the job is nearly done.

The amount of gravel removed so far is truly staggering, about 3 million tons, say Matt Ketchum and David Laster, two Anchorage-based managers for Granite.

How much is 3 million tons?

Enough to fill 349 trains, with 86 cars in each train. Enough to pave more than 1,900 miles of two-lane highway.

Ketchum and Laster believe Granite has delivered top performance on a tough job involving a lot of partners and complexity.

McQueen concurs.

“These guys have hit every milestone,” he says.

Gravel plays a vital role in Alaska construction, and the Birchwood gravel is going to good use. During an interview with Ketchum and Laster, they learned by smartphone that Granite had won a street resurfacing contract in South Anchorage.

“Eklutna rock will be on Dimond Boulevard this summer,” Ketchum says.


Aerial view of the gravel load out, rail siding, and future Birchwood Industrial Park. Granite expects to complete harvesting gravel this summer.

©Jerry Lavine, Courtesy of Eklutna


The Birchwood Industrial Park is across the railroad tracks from the Birchwood Airport. The last section to be cleared is the few acres in the center of the photo to the right of the largest gravel pile waiting to be loaded into railcars.

©Jerry Lavine, Courtesy of Eklutna Inc.


Good Neighbors

A priority on the gravel mining operation has been showing consideration for Birchwood residents.

“It’s a little bit of an oxymoron to say a gravel pit can be a good neighbor, but you can with monitoring,” Ketchum says.

In 2010, the Resource Development Council for Alaska and the Alaska Conservation Alliance gave Granite an award for “doing it right.” The organizations said Granite “took several extra steps to mitigate noise issues and installed water testing wells to detect any unexpected changes to water quality in the area.”

Randy McCain, a Birchwood resident active in the local community council, says residents had concerns such as how many hours per day the gravel loading would run. Generally, the project hasn’t been a problem, he says, and Eklutna is quite engaged and responsive.

“They would get a very high score as far as addressing community concerns,” McCain says.


Eklutna Board of Directors: Maria Coleman, Kim Zello, Lee Stephan, Debbie Fullenwider, Michael Curry.

Photo courtesy of Eklutna Inc.


The Business Model

Far from being an unwanted obstacle, the Birchwood gravel actually has proven key to developing the industrial park. The way it works is, Granite mines and markets the gravel and pays Eklutna and CIRI a royalty.

Eklutna gets its land cleared and leveled at no cost, with the royalty providing seed money to further advance the development, McQueen says.

Exactly what configuration the site will take once the gravel is gone remains unclear. Will it be divided into industrial lots? Or will one or two major tenants occupy all the space?

McQueen says Eklutna won’t try to guess what users want.

“It’s market-driven,” he says. “Someone could bring an idea to you that you never thought about.”

He doesn’t believe the site will remain an open space. He sees buildings going up on most of the acreage. Eklutna isn’t planning to target any one industry. Rather, it hopes to attract interest from the oil and gas sector, manufacturing, logistics and maybe even the military.

Certain parties already have approached Eklutna, but McQueen declined to name names. He did say that in 2010, people with a venture known as Denali talked of using the site as a laydown yard for pipe. Now defunct, Denali was a short-lived partnership of BP and ConocoPhillips created to pursue an Alaska natural gas pipeline.


Wide-Open Space

One selling point is that the industrial park is expected to be covered under Anchorage’s U.S. Foreign-Trade Zone designation. A foreign-trade zone is a place where companies can enjoy delayed or reduced duties on foreign merchandise.

McQueen wouldn’t venture an estimate of what it will cost to fully develop Birchwood Industrial Park. Eklutna will expect tenant companies to share certain development costs, he says.

Eklutna hasn’t yet chosen a contractor to finish development of the site.

The corporation is looking to the Alaska Railroad to help promote the industrial park.

“We’re very excited about working with Eklutna on this,” says Jim Kubitz, the railroad’s vice president for corporate planning and real estate.

It would be wonderful, he says, to have such a spacious site in downtown Anchorage, home base for the railroad and the Port of Anchorage.

The railroad plans to make a brochure to tout the Birchwood park, Kubitz says.

The site has a lot going for it, he says. First, the land already is zoned industrial. That’s big, Kubitz says. The site also is easily accessible via Birchwood Loop Road, which runs off the Glenn Highway at the North Birchwood exit.

Another plus is the close proximity of the railroad’s Birchwood yard, which has several sidings, or extra tracks, where rail cars can sit. A rail spur long enough to accommodate 43 cars also has been built alongside the industrial park tract. The spur could be of great use for park users.

Overall, the Birchwood tract is “such a good location for a customer who needs rail service,” Kubitz says. He believes the site could hold appeal for warehousing, or for managing raw materials or large equipment.

The railroad’s own customers obviously are candidates for the Birchwood site, as are companies in Anchorage in need of more elbow room.

“I’ve actually already spoken to potential customers,” Kubitz says.

Eklutna preferred not to say much about its project until the gravel removal was well along, McQueen says. Now he’s thinking the company might hold a special event toward the end of summer to showcase the Birchwood Industrial Park.

“We’re ready to tell the world we’re open for business,” he says.

Wesley Loy is a journalist living in Anchorage.

  This originally appeared in the May 2013 print edition of Alaska Business Monthly magazine.
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