Wards Cove sale a new day for Native corporation
March 21st, 2011 | Dimitra Lavrakas
The sale of Seattle-based Wards Cove's Alaska fishing interests in February marked the end of an era. Founded 80 years ago in Ketchikan by the Brindle family, the company will no longer own any fishing business in Alaska, but will still operate stores in the state.
"They don't have any more fishing businesses here," said John Eckels, president of Siu Alaska Corp., which has fishes and processes pollock, cod and crab in the Bering Sea.
The sale was completed by BSAI Partners, a joint venture between Siu Alaska Corp., a subsidiary of Norton Sound Economic Development Corp. and Coastal Villages Pollock, which is owned by Coastal Villages Regional Fund.
The Norton Sound Economic Development Corp. is a private, nonprofit Community Development Quota corporation that represents 15 communities in the Norton Sound Region. NSEDC and Siu have interests in a number of Bering Sea vessels including pollock at-sea catcher processors, a cod freezer-longliner and crab vessels. The corporation also owns quotas for red king crab, snow crab and golden king crab, and IFQ and CDQ quotas for halibut and sablefish.
Since 1992, the CDQ program has generated more than $500 million in revenues and funded docks, harbors and construction of seafood-processing facilities in Western Alaska and provided equity ownership in the pollock, cod and crab fishing industry. The program provides funding for education, employment and training programs for those regions served by the CDQ programs.
Individual fishing quotas or "individual transferable quotas" are one kind of catch share by which governments regulate fishing by weight or for a time period.
"We have an interest in a big at-sea processor and Glacier Fish Co., but we don't pretend to be operators or managers," Eckels said. "It's the Alaska Boat Co. that does all the managing for Wards Cove, and they will continue to manage for us."
Alaska Boat Co. is owned by Wards Cove.
Seven trawl and one crab vessel were included in the sale, approximately 4 percent of the pollock quota, and partial ownership of the Alyeska Seafoods processing plant in Dutch Harbor, a big processing plant on Unalaska Island, with the other partner being the Japanese seafood giant Maruha Nichiro.
About the sale, Alec Brindle, president of Wards Cove, said in a news release: "We are certain the buyers share in our family's commitment to the sustainability and responsible harvest of Alaska's great seafood resource."
For the lawyers completing the two-year process involved in the sale was a real challenge.
"This deal was a win for both parties in that it will provide additional opportunities for the people of Western Alaska while maintaining a commitment to sustainability and responsible harvest of Alaska's seafood resource," said Stephen Johnson, an owner at Garvey Schubert Barer, a business law firm with experience in maritime and fishing industry transactions, and who led the BSAI Partners legal team. "Although this wasn't the biggest fishing industry transaction we have done, it was undoubtedly the most complex."
Being environmentally conscious of the affects its fishing activity could have on the salmon of Norton Sound is of course very important to Siu Alaska, Eckels said.
"This trawling isn't bottom trawling, it's mid-water" he said. "The biggest issue is salmon bycatch, and some of that is heading for our regional rivers. We're concerned.
"We actually have a good record on bycatch and we'll do anything we can to improve on that. We'd be interested in new smart gear, salmon excluders and looking at where we fish."
The other challenge is what to do with whatever bycatch they do get, with the puzzling rule that says that bycatch either be thrown over the side or given away.
"There are some programs where vessels are allowed to give the fish," Eckels said. "I honestly don't know if any of the groups in our region would qualify. Then again, getting the fish from Dutch Harbor to Nome would be difficult."
The A fishing Season is in full swing now until late March with Season B starting up in June. So far everything is going well, he said.
"We're doing pretty good and there seems to be a lot of fish out there," Eckels said. "Roe recovery has been low though."
The roe is sold to Japan, he said, or it's delivered to Alyeska Seafoods.
The future looks bright for the company and the communities it represents.
"We require of all of our investments that they give opportunities to our regional residents for employment," he said.
As for Wards Cove, it's set it sights on something completely different. For its five-acre property in Seattle, Wards Cove is developing a mixed-use project called Wards Cove on Lake Union made up of 12 floating fee-simple homes, a Marina Club, an 11-slip private marina for super yachts and 12,500 square feet of Class A office lofts. It also has a facility on the eastern shore of Lake Union.