When the Little Traverse Bay Bands of Odawa Indians replaced the former Victories Casino with the new Odawa Casino in 2007, the tribe was left with a 22-acre site and a vacant building at the southern end of Petoskey.
After demolishing the building in 2013, the tribe created Odawa Economic Development Management Inc. (OEDMI) to lead a redevelopment project at the property. Dubbed Victories Square, the $21 million project’s first phase over seven acres includes a Courtyard Marriott hotel, a Boston’s Restaurant and Sports Bar and a multi-tenant commercial building with a Starbucks.
After three decades of running tribal gaming operations, Michigan-based Native American tribes have started to leverage their casino revenues to launch economic development corporations and diversify their economies. The tribes say the moves are necessary to ensure their economic sustainability and benefit tribal members for generations to come.
“We wanted to make sure in this initial phase that we could have good credit for the national tenants that would be able to bring some stability from a cash flow perspective,” said Tanya Gibbs, president of the OEDMI board of directors.
OEDMI plans to use the cash flow from commercial properties to fund the continued development of Victories Square.
In the first phase, OEDMI secured $15 million in private funding, plus a $21 million loan guaranty for construction financing from the U.S. Bureau of Indian Affairs, the largest guaranty to a non-gaming project in the continental U.S., according to a report in Tribal Business Journal.
“Construction financing on trust land can be a tricky thing. For lenders that aren’t familiar with Indian Country, that’s a little bit scary to them because they can’t have the same type of collateral and the same type of security interest that they might if you just went to go build a Starbucks on any old piece of property,” Gibbs said.
As OEDMI focuses on the Victories Square, it also is working on a redevelopment plan for the former King’s Inn property the tribe owns in Mackinaw City.
In setting its economic development strategy, the tribe has eschewed the holding company model deployed by other Michigan tribes in favor of a case-by-case approach to economic development and business formation, Gibbs said. Separate tribal entities focus on contracting and other ventures, she added.
“There are a lot of different avenues to economic development in Indian Country,” Gibbs said.