KAKE, Alaska — The debt-saddled Gunnuk Creek Hatchery is slated to close, prompting concerns from local leaders and residents about the impact that will have on the town’s economy and access to fish.

Kake Mayor Henrich Kadake Sr. said closure will cost about 30 jobs.

The hatchery owed the state nearly $14 million it was denied another loan. That left the hatchery, owned by the Kake Nonprofit Fisheries Corp., unable to operate. It defaulted on its payments and the state foreclosed.

Kadake and hatchery manager John Oliva blame a dam failure above the hatchery in 2000 for much of the trouble the facility found itself in, Capital City Weekly reported (http://bit.ly/1nqf1VR ).

While a new dam was built, it stopped water flow, killing fish. An improved dam was completed in 2007 but returns weren’t sufficient to recover operating costs, prompting the hatchery to seek state loans.

Last year, Oliva said the hatchery was about 100,000 fish away from recovering its operating costs and officials expected a good run this year. They just weren’t able to secure another loan.

All told, the nonprofit owed about $22 million, Kadake and Oliva said.

Gunnuk Creek Hatchery was permitted to produce 65 million chum, 20 million pink salmon and 500,000 coho, Oliva said. The hatchery will release about a million coho into Gunnuk Creek before it closes.

The hatchery’s future is unclear. The private, nonprofit Northern Southeast Regional Aquaculture Association agreed to buy the equipment from the state and will use it in Southeast Cove, about eight miles away.

The association also is studying whether the Gunnuk Creek Hatchery is viable, association general manager Steve Reifenstuhl said. It has until year’s end to decide if it wants to run the hatchery. Reifenstuhl said the hatchery would cost more to operate than any of the association’s other hatcheries.

He said it also would probably cost “a couple million” dollars in infrastructure, at least, to address stream debris and temperature issues. The association is only considering Gunnuk Creek Hatchery because it is so dependent upon its Hidden Falls Hatchery, he said.

No matter what happens, the association intends to keep stocking Kake with fish through its Southeast Cove fisheries program, Reifenstuhl said.

Kadake said that will help with the community’s continued access to fish, especially if fish are processed in Kake.

He said some ideas have been discussed for what will happen to the hatchery if the association doesn’t take it over but nothing has been decided.

Oliva said, as of now, he has been told to board everything up by June 30. “By the end of the year, maybe someone will operate it. Or it could just rot away,” he said.