Construction Expected to Begin This Winter on Alaska Cargo & Cold Storage Project

Alaska Cargo & Cold Storage project
An artists’ rendering of the planned 190,000 square foot Alaska Cargo & Cold Storage project. Photo courtesy of McKinley Capital Management.

Construction is set to begin this winter on the first phase of the $200 million Alaska Cargo and Cold Storage project, complete with at least 190,000 square feet of climate-controlled cargo and cold storage capacity.

The facility at Ted Stevens Anchorage International Airport is a joint venture of industrialist Chad Brownstein and McKinley Capital Management, LLC in Anchorage, led by Rob Gillam. Ultimately, it is expected to have 32.5 million cubic feet of warehouse space, with technologies ranging from climate control zones to a ground source heat exchange and an oxygen reduction fire suppression system.

“We are currently in discussion with potential tenants whose input will influence specific size and features of the facility,” said Joe Jacobson, vice president of private equity for McKinley Alaska Private Investment. “Actual percentages of each in all phases are still being determined and will be driven by tenant needs.”

Joint venture partners are busy doing all the planning and prep work necessary for the first phase of construction, and actively engaging with potential major tenants, Jacobson said.

Alaska Energy Authority (AEA), the state’s lead agency for statewide energy policy and programs development, is also involved, having applied for and been awarded a $21 million BUILD grant for the project. AEA is responsible for administration of those funds.

Federal BUILD grants are intended to fund multi-modal, multi-jurisdictional projects that are more difficult to support through traditional Department of Transportation programs. AEA and federal transportation officials are working to execute the BUILD grant agreement, Jacobson said.

“Seafood is expected to be an important product handled at the facility, including Alaska seafood,” he said. “Given that Anchorage is the world’s fourth-busiest cargo airport, it should be noted that the primary business case is built around the transfer of global air cargo originating outside of Alaska. As such seafood, while important, is not expected to comprise the bulk of the space in the overall facility.”

Planned Alaska Cargo & Cold Storage facility
A lot at Anchorage International Airport where the planned Alaska Cargo & Cold Storage facility would be built. Photo: Ted Stevens Anchorage International Airport.

The vast majority of the cargo will be moving through Alaska between North, Central and South America and Asia, “but we expect that more Alaska importers/exporters will take advantage of the facility to increase imports and exports via air cargo,” he said.

So how then will importers, exporters and others ensure that incoming and outgoing seafood products are correctly labeled, to avoid fraud issues such as cheaper seafood being masked as a more expensive product, or farmed or genetically produced project bearing incorrect labels?

“Ultimately this will depend somewhat on the tenant mix of ACCS but isn’t expected to be significantly different than any other air cargo warehouse or transfer facility in the U.S.,” Jacobson said.

“The project, as presently envisioned, is primarily a climate-controlled warehouse and transfer facility, not a food processing facility,” he explained. “We do, however, see significant potential as an e-commerce fulfillment hub.”

“The facility, which is designed to take advantage of Anchorage’s special cargo transfer rights, has the potential to streamline the global supply chain and the global cold chain, making ANC a global logistics hub,” Gillam noted in previous comments about the project.

According to airport director Jim Szczesniak, the new facility will enhance the efficiency of the global supply chain and the airport’s position as the center of the air cargo world.

The more than 200 widebody cargo freighter operations per day can utilize a new asset at the airport, Szczesniak said, adding that the new facility will provide an additional mechanism for the air cargo industry to take advantage of this airport’s liberal cargo transfer rights and foreign trade zone.

Smaller seafood processing firms have expressed interest in being potential tenants, but said to date they had little information. Szczesniak said there is also a certain amount of interest from the medical community in storing pharmaceuticals there.

The airport’s air cargo transfer rights in the U.S. allow for interline cargo transfers to and from non-U.S. carriers, interline cargo transfers to and from U.S. carriers, cargo transfer online between an airline’s aircraft, aircraft change of gauge, and commingling of U.S. and non-U.S. traffic on the same flight.