May 6, 2026

Ky Holland

Nice article in the ADN on the proposed AI data centers on military facilities in Alaska. But before we all start chasing another shiny “economic development opportunity,” we need to take a harder look at the actual economics.

Generally, projects built on military land do not pay local property taxes. The companies involved will likely be structured through LLCs, subsidiaries, and special-purpose entities that minimize corporate taxes. The facilities themselves may be built by layers of separate LLC contractors. The workforce? Likely a mix of nonresident construction workers and highly specialized employees in a state with no income tax. And once operational, these giant facilities may employ surprisingly few people — perhaps only a few dozen permanent workers.

Meanwhile, local governments and the state still carry the burden of roads, utilities, emergency response, energy infrastructure pressures, housing impacts, and long-term system costs – and generate little new revenue or actual economic diversification. Savings will still pay the bills in our “pension economy.”

Yes, there will be some construction jobs. Yes, a few employees may buy homes and pay property taxes. But compared to the scale of the infrastructure and energy demands, what initially looks like a transformational opportunity risks becoming another hollow shell of economic potential.

We need to get smarter about economic development in Alaska. We can’t keep running around like squirrels chasing the next shiny distraction while ignoring the structural problems right in front of us.

The energy solution is not mysterious. We already know much of what needs to be done to support Cook Inlet basin development and frankly, an import facility. But we’ve spent over a decade trapped in a kind of “gasline coma,” waiting for a megaproject dream to save us while avoiding the practical work of building the future that’s actually within reach.

In the near term, LNG import infrastructure is likely the key to stabilizing Southcentral gas supply.  But the deeper issue is the enormous opportunity cost of losing a decade of potential while the rest of the global economy expands and diversifies while we we watch our own house burns down around us and though more gas on the fire:

34,000 working-age Alaskans leaving the state.
Schools struggling and increasingly unstable.
Communities shrinking.
A worsening fiscal crisis.
And an economy still overly dependent on hope, extraction, and the next big promise.

At some point, we have to wake up and stop confusing announcements with strategy.

Ky