SPILL THRUSTS VALDEZ INTO ECONOMIC BOOM

By LIZ PULLIAM
Daily News reporter

VALDEZ- Gale Harvey crouched in a hallway at Job Service, carefully rolling a cigarette as he waited for word on a job. He's hoping to make $16.69 an hour scraping oil off beaches in Prince William Sound. Harvey, in his 40s, is from Chugiak. He's already spent a week living in his van, waiting. But he's sure he'll get work.

"It's just a matter of time," he said, lighting his cigarette and inhaling deeply. "We're all going to go to work."

Harvey is one of a flood of transient workers who've landed here trying to cash in on oil cleanup paychecks. The spill from the Exxon Valdez has thrust this seaport town into an economic boom unmatched since the '70s, when pipeline terminal construction filled bars and tent cities with eager workers. Estimates peg the town's size now as nearly double its normal wintertime population of 3,500.

Shortly after the spill, Valdez was inundated with bureaucrats, oil executives and the media, who quickly snapped up every available hotel room. Residents began offering their couches, hideabeds and spare rooms for $30 to $60 a night; tourism officials say at the height of the crush about half the city's homes had a bed for sale.

Transient workers were close behind; more than 700 have signed up for work at Job Service. City crews plowed a spot on the harbor spit for trailers and tents, while others slept in cars parked on city streets.

Restaurants and bars are overflowing. The popular Pipeline Club had twohour waits for dinner and shouldertoshoulder crowds in its bar. City garbage, street and park crews have also been working overtime, cleaning up streets and opening areas for newcomers to camp.

Acting police chief Joseph Michaud and his crew of 18 officers, who serve as cops, firefighters and paramedics, have been working double shifts since the disaster began. The department's $25,000 budget for overtime was spent by the time the spill had grown two weeks old. Although a dramatic increase in bar fights, thefts and speeders has been noticed, the open drug use and prostitution that marked the pipeline days has yet to surface.

"We've been told to do whatever's necessary to maintain order in Valdez," Michaud said. "We just don't know who's paying for all of this."

Exxon's insurance company has assured the Valdez city attorney that the oil company will pay for any costs directly attributable to the oil spill.

Indirect costs, however, may not be compensated. The town's cooperative electrical utility, for example, lost $40,000 when the herring season was canceled because local seafood processing plants remained shut down. The utility stands to lose three times that much if the salmon season is disturbed, said Doug Bursey, general manager of Copper Valley Electric Association. A significant shortfall in revenue might have to be passed on to local consumers in a rate hike, Bursey said.

Hotels, restaurants and retail stores are enjoying the brunt of the boom. Rumors of price gouging proved unfounded so far, although sheer volume of sales is providing a healthy boost to the local economy. Ima Terry, manager of the Valdez market, has been doubling and tripling milk and produce orders to keep up with the demand. Normally 60 gallons of whole milk last a week; her last order of 160 gallons disappeared in a few days.

"We're a lot busier than we usually are even in the summer," Terry said.

Terry, like other Valdez merchants, expects the good times to last as long as the cleanup crews, oil executives and lawyers remain in town.

"We're figuring we'll stay busy at least until September, unless they start getting their supplies sent down from Anchorage," Terry said.

Hardware and sporting good stores reported similar rushes. Cleanup contractors bought all of the rope and most of the rubber boots from South Central Hardware, although sportsfishing supplies, ordered long before the spill and just recently delivered, gather dust on the shelves.

"Nobody knows what's going to happen," said a hardware store clerk. "Nobody knows if there's going to be any fishing this year."

Charter boat owners say many people have canceled their reservations for the summer. Holland AmericaWestours, the state's largest cruise company, is anxiously tracking reservations, not just for the one cruise ship that calls at Valdez, but for all its Alaska tours.

"People have no idea (what's affected). . . . I'm getting questions like, "Is there oil on the streets of Fairbanks?' " said Rich Skinner, director of public relations.

So far, Skinner said, he's recorded just three cancellations. If the number grows, HollandAmerica is prepared to fight back with an aggressive ad campaign. If even that doesn't help, Skinner said, HollandAmerica will simply cancel its Prince William Sound cruises.

"It's an enormous potential problem," Skinner said. "But we're fortunate in that we have floating assets . . . we can just move somewhere else if we have to."

Touristdependent merchants in Valdez aren't so lucky. Greg Will, president of the Salmon Exchange, a company that cans sportscaught fish for tourists, expects his season to be wiped out for years to come.

"It's pretty well branded into people's minds," Will said. "There's natural oils in the fish that I pack, and people are going to see that, and I'm going to get phone calls."

Will also worries that the current boom may actually interfere with tourism if oil companies and contractors continue to take up hotel rooms throughout the summer.

"People are going to come and see all the activity going on and pass on the word that Valdez isn't the place to be," Will said.

Valdez Convention and Visitors Bureau officials, however, cling to the hope that all the publicity generated by the spill may ultimately have a positive effect.

The bureau had looked forward to a recordbreaking summer, with 49 cruise ships expected, up from 37 last year and 29 the year before. They figure cruise ships disgorge about 15,000 people, who spend about $50 each while they're in town. Another 85,000 usually come by plane or by car, spending about $60 a day.

"On national TV, they're showing shots of the spill, sure, but they're also showing the mountains and the incredible scenery," said Sandy Anacker, the bureau's tourism manager. "We think that's going to generate interest.

"And besides, at least now everybody knows how to say Valdez."

Despite the crush of world attention, Valdez remains a friendly town, the kind of place where locals smile at newcomers and strangers strike up conversations in grocery stores. The fresh smell of salt air wafts up from the harbor, a scenic jumble of seiners, charter boats and floatplanes beneath the Alplike mountains that ring the town.

Among locals, there is anger over the spill, but a sense of practicality prevails. Oil dollars provide 92 percent of the city's $31 million budget. Most local jobs, and amenities such as an $8.6 million civic center, have come directly or indirectly from the oil industry.

"When all this is over, we still have to live with the oil company," said Bev Slaughter, manager of a liquor store and a 30year Valdez resident. "They have afforded this town one hell of a standard of living, and it's not time to stick knives in their backs."

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