AT A CROSSROADS: Is Anchorage, Alaska the city of the future?
Tuesday’s rumors of a potential thaw in relations between U.S. and Chinese leaders came as little surprise to those who predicted a clean slate between the two countries under the Biden administration. The location of a possible Sino-American summit between diplomats from the two countries may have raised a few more eyebrows — but not to anyone looking to where the future might lie.
For a global crossroads, Anchorage, Alaska (population 293,000) is awful shabby. Like many of us, its modest skyline has seen better days and its dingy downtown could desperately use a good makeover. Its population is in decline, its large public spaces are in decay and the city is plagued by issues of despair such as high rates of crime, unemployment and domestic violence.
Things aren’t any better on a statewide level in “Seward’s Icebox.” Once one of the nation’s oil all-stars, Alaska now finds itself more of a benchwarmer. Oil production is down nearly 80% from its peak in the late 1980s, a trend that has wrought a predictable exodus of high-paying jobs, tax dollars and corporate giving.
It gets worse. Alaska’s 730,000 residents lead the nation in a number of dubious categories ranging from chlamydia rates to suicides, the state university system is on the brink of collapse and the Anchorage mayor resigned during the pandemic for literally showing his ass to a TV reporter.
The nation’s northernmost metro area can’t even field a decent hockey team.
It would seem the last place to look for the next big thing would be Anchorage, but on closer inspection the sleepy outpost at the edge of North America appears to be perfectly positioned to become one of the big winners in the race to own the future. Here’s why.
The Glen Alps parking area at the edge of Chugach State Park is never empty. Whether overflowing with weekend warriors in high summer or speckled with a couple die-hards seeking midwinter snow, the sprawling parking lot is a jumping-off point for endless outdoor adventures. Just 15 minutes from the heart of the city, the area is a world-class recreation destination for outdoor enthusiasts of all ages and abilities.
From Glen Alps, hikers can access the 3,510-foot Flattop Peak, which looms high over the city and is likely the most-climbed mountain peak in the state. The more adventurous can go further afield, the many backcountry peaks and valleys of the 495,000-acre state park. Those wide-open spaces mean that even when the parking lot is full, it doesn’t take much effort to find oneself surrounded by nothing but wilderness.
The backyard park is just one star in the constellation of interlinked recreational opportunities in Anchorage. The city’s unique trail system is another. With more than 120 miles of paved trails linking the vast municipality, Anchorage residents have their pick of destinations and routes to explore. From the urban Tony Knowles Anchorage Coastal Trail alongside Cook Inlet to the salmon-splashed Ship Creek Trail to the bear-infested foothills of the Far North Bicentennial Park, the trail system is a nearly limitless network of neighborhood routes to adventure.
That’s the tip of the iceberg for what might well be the country’s most recreation-friendly city. The Nordic ski trails are world-class, there’s salmon fishing downtown, surfing along Turnagain Arm and glacier-lined highways leading north or south to destinations as wild as one can imagine.
For most Americans, Alaska is the epitome of out-of-the-way. Often relegated to a small, geographically incorrect corner of the map, the state looms as much as myth as reality in the minds of many. This mental distance often brings with it a warped sense of time and space for those who have never traveled to the state and believe it to be a far-off and mystical Timbuktu rather than a relatively reachable Toronto.
But in fact, Anchorage is far closer to just about everything than most people think. By air, it’s less than three hours from Seattle, about five hours from L.A. and six from Honolulu. International shipping companies know this already, with the city’s Ted Stevens Anchorage International Airport recently topping the list of the world’s busiest cargo airports. This is because Anchorage is a key refueling point for global flights and is the primary air link between North America and Asia.
Climate change is only likely to accentuate this advantage. One of the world’s busiest shipping routes is just to the south of Anchorage in the Gulf of Alaska, and climate change could lead to an increase in North Pacific maritime traffic due to the potential for more trips through the Arctic. If sea ice allows for an increase in Northern Route shipping, Alaska ports could see a dramatic uptick in international importance.
The northern regions of the planet are experiencing climate change at a faster rate than anywhere else in the world. In Alaska’s Arctic regions, thawing permafrost and changing weather patterns threaten salmon runs and caribou migrations. But it’s not Phoenix. And this brings up another key selling point for Anchorage and Alaska: It’s cold.
The average high temperature in Anchorage in July is just 62 degrees Fahrenheit. In Albuquerque it’s 93. As cities in the “Lower 48” become virtually unlivable during the summer months, Anchorage will remain temperate even under the most dire forecasts. Combined with ample open space, this means the city could become a key destination for “climate refugees” seeking homes where air conditioning isn’t mandatory for summertime survival.
This abundance of chill could be another potential source of growth for Alaska. Computer servers generate a tremendous amount of heat — heat that’s more easily dissipated in cooler climates. This advantage could help spur new industry in Alaska, including tech companies seeking the next Silicon Valley.
One impediment to an Alaska tech rush could be the state’s relatively slow internet speeds and lack of bandwidth. But even that is soon to change. Elon Musk’s Starlink has announced plans to integrate Alaska into its global network of satellite Internet, one of several companies rushing to provide faster, more reliable connectivity to the Last Frontier. While it’s hard to imagine anyone in the tech industry relocating to Anchorage today, that dream will soon become a reality once the city’s internet speeds can rival those in San Jose or Hong Kong.
Unlike many of its rivals for 21st century “It” city, Anchorage is unhindered by natural resource scarcity. Freshwater is abundant in Southcentral Alaska, much of which remains covered in glaciers. There’s so much water in Alaska, in fact, that a former governor once suggested (perhaps only half-jokingly) that the state could build an H2O pipeline to California.
Food security is a major potential hurdle for Alaska — but another that is likely to be solved with innovation. Farming entrepreneurs are already taking advantage of abundant summer sunlight by building innovative indoor structures able to produce all manner of fruits and vegetables. In the future, these techniques could be scaled up in order to reduce Alaska’s reliance on the outside world for its food supply.
Far from being a cultural wasteland, Anchorage is actually a vibrant and diverse urban oasis that’s relatively free from racial animus and conflict that has plagued other cities. Some of the city’s neighborhoods are among the country’s most diverse, and more than 100 languages are spoken in the homes of the city’s nearly 50,000 schoolchildren.
Alaska’s uncertain fiscal future is undoubtedly a problem that must be solved. Over the past decade, the gap between state revenues and expenditures has grown at an alarming rate, leaving lawmakers at a difficult crossroads. But even in the dire world of budget deficits, Alaska has an impressive hole card: The Permanent Fund.
A sovereign wealth fund created in the late 1970s, the Alaska Permanent Fund is the envy of nearly every state in the nation. Now worth more than $70 billion, the fund was originally created as a sort-of rainy day fund for when the oil and gas money eventually ran out. That’s now happening.
Alaska’s annual state budget is around $12 billion — of which it can afford only about half without dipping into the massive Permanent Fund. Further complicating matters is the fact that the state also pays a dividend from the fund to every Alaskan — usually it’s more than $1,000 — which means each Alaskan has a personal financial stake in what happens with the money.
Many economists have argued Alaska should use the earnings from the fund to pay for state government. But in order to do that without draining the principal of the fund, either new taxes, budget cuts or a reduction of the Permanent Fund Dividend — likely, all three — will be needed.
As you may imagine, that’s not the kind of choice politicians like to make. And it’s not a choice any have. In recent years, Alaska’s Legislature has been mired in partisan conflict and has failed to come up with a long-term fiscal plan. This failure has led to massive uncertainty in the state and is a major reason why Alaska’s economy continues to stagnate.
But it’s a problem plenty of states would love to have. And one that could easily be solved. In fact, it’s not a stretch to imagine a world where Alaska is able to both leverage its wealth to pay for state government AND invest in forward-looking industries and infrastructure in order to build a viable economy based on tourism and technology.
Will it happen? It’s hard to say. As of Tuesday it was still unclear whether ambassadors from the United States and China still planned to use the city as a convenient place to meet in the middle on the issues that divide them.
But with its enviable location, temperate climate, vibrant culture and a huge nest egg with which to help plan its future, it wouldn’t be a bad idea to bet on Anchorage.
CORRECTION: A previous version of this story misstated the amount of the AK budget.
Matt Tunseth is a freelance writer who lives in Anchorage, Alaska. Write to him at matthew.tunseth@gmail.com.
