Kenai's Business Climate:
A Ripe Environment for Opportunity
The winters may be long in Alaska but the sun is shining bright on Kenai’s economy.
The city’s strong cultural history and entrepreneur community have continually inspired businesses to move and grow their businesses here, creating consistent growth year-over-year.
Industries Fueling The Kenai
Kenai’s economy is driven by a diverse range of industries, making it less susceptible to state and national recessions and allowing it to weather economic storms more effectively. Some of the industries that contribute to Kenai’s economic resilience include:
Healthcare
Oil & Gas
Professional Services
Maritime Trades
Fishing
Tourism
Real Estate
Agriculture
Low Tax Business Environment
One of the key indicators of Kenai's thriving business climate is its impressive sales growth. Despite the challenging times of 2020 and 2021, the city saw a 16.7% growth in sales tax revenue, which is a testament to the resilience of its businesses. Moreover, taxable sales increased by 10.4% in 2022, indicating that Kenai's economy is not only stable but also expanding.
Kenai's businesses generated a whopping $662,002,210 million in gross sales in 2021, and this number has been increasing every year since at least 2017.
One of the reasons businesses are drawn to Kenai is the city's stable property tax rate, which has not seen an increase in nearly two decades. This predictability in property tax rates has been a key factor in attracting investment and encouraging businesses to set up shop in the city.
Alaska is also known for its low tax environment. Residents of Alaska enjoy no income taxes and receive the Payment Fund Dividend from the state government each year, which in 2023 is projected to be a very generous payout of approximately $3,800. Businesses also enjoy a maximum marginal tax rate of 9.4%
Investing In the Future of Kenai
Kenai is also taking proactive steps to create jobs and economic opportunities through projects like the Bluff Stabilization Project. This project not only preserves critical infrastructure but also allows for the revitalization of Old Town, creating a new wave of development and growth.
The Kenai Waterfront Revitalization Project is another initiative that is engaging the community to develop a vision for a 160-acre area along the Kenai River,which would include mixed-use development for commercial, residential, recreational, and cultural opportunities. The Land & Business Opportunities Land Management Plan is yet another policy that encourages responsible growth and development of a large portfolio of City-owned lands available for lease and sale.
Kenai also invests in infrastructure improvements in the city as outlined in the five year Capital Improvement Plan, which includes the Airport Fund, General Fund, Water & Sewer Fund, and Senior Citizens Fund, Congregate Housing Enterprise Fund, and Personal Use Fishery Fund.
Incentivizing the Business Community of Kenai
Moreover, Kenai is offering new business incentives, such as the proposed development of over 7 million in private investment in 2022, to attract new investment and promote economic growth. This is a clear indication that the city is committed to creating a business-friendly environment that supports entrepreneurs and fosters innovation.
The City of Kenai offers incentives for the development of city-owned property. The City boasts over 300 properties ideal for businesses in transportation, tourism, outdoor recreation, and service industries. Interested parties can explore lease and purchase options for City-owned land, with the possibility of no lease payments for up to five years.
Kenai's positive business climate is a shining example of how a supportive community, proactive government policies, and a dynamic entrepreneurial ecosystem can combine to create a fertile ground for economic growth and development. With its stable tax rates, forward-thinking development plans, and innovative incentives, Kenai is poised to continue attracting new businesses and fostering a thriving economy for many years to come.