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Published in Economic Development
From left: U.S. Small Business Administration Assistant Administrator in the Office of Native American Affairs Jackson Brossy; Tribal Business News Editor and Publisher Levi Rickert; and Arlando Teller, deputy assistant secretary of tribal affairs at the U.S. Department of Transportation. From left: U.S. Small Business Administration Assistant Administrator in the Office of Native American Affairs Jackson Brossy; Tribal Business News Editor and Publisher Levi Rickert; and Arlando Teller, deputy assistant secretary of tribal affairs at the U.S. Department of Transportation. PHOTO BY JOE BOOMGAARD

‘Opportunities are unbelievable’: Summit highlights economic development in tribal communities

BY Thursday, October 06, 2022 10:39pm

GRAND RAPIDS — Tribal leaders gathered Thursday in Grand Rapids to share the “unbelievable” amount of opportunities to diversify revenue streams and launch new investments for the benefit of tribal citizens.

The first Great Lakes Tribal Economic Summit took place Oct. 6 at Grand Valley State University’s Seidman College of Business in downtown Grand Rapids. The event featured panel discussions among state and federal economic development officials and leaders from various Native American tribes across the Great Lakes region.

“As undefined as the economic climate is right now, the opportunities are unbelievable,” said Joe Schultz, CEO of Sault Tribe Inc., the independent business arm of the Sault Ste. Marie Tribe of Chippewa Indians. 

The Sault Tribe formed Sault Tribe Inc. to diversify the tribe’s revenue stream through wholly owned businesses as well as joint ventures. The holding company returned its first dividend of $3.2 million to the tribe in 2021.

Schultz noted that the construction industry in particular has brought strong returns for the tribe.

“We think we have a really good foundation in the construction industry now and in construction management,” Schultz said. “We’re taking challenges as they come.”

In addition to construction management, Sault Tribe Inc. has also pursued opportunities in the cannabis industry, including by leasing commercial property to multiple dispensaries in the Upper Peninsula.

“We generated a clear $1 million with our partnerships with the cannabis industry last year,” Schultz said. “Every dollar that we can pool in those ways, are dollars that we can invest in the cash flow of larger projects.”

Schultz and other tribal economic development leaders agreed that the COVID-19 pandemic and subsequent casino shutdowns pushed tribes to focus more than they ever had on diversifying their businesses outside of gaming. 

Similar to Sault Tribe Inc., the Little Traverse Bay Bands of Odawa Indians formed Odawa Economic Development Management Inc. (OEDMI) in 2011 as a tool to diversify the tribe’s assets. The tribe tasked OEDMI with redeveloping an approximately 20-acre site near Petoskey that formerly housed Victories Casino. 

OEDMI Vice President Alan Proctor pushed for a mixed-use development on the site, which recently wrapped the first phase of construction with a hotel and several businesses. A planned second phase will include 50 units of workforce housing and a second hotel, Proctor said.

OEDMI is in the process of refinancing the first phase of the project, which relied entirely on loans and various incentives, Proctor said. 

“We really thought this would be good to give this a shot, and it’s going to be a good year for us,” Proctor said. “This fits the region well and makes the tribe look good.”

Seven-generations, overcoming challenges

Terri Fitzpatrick, executive vice president, chief real estate and global attraction officer at the Michigan Economic Development Corp., said only a few tribes had an economic development arm a decade ago. Tribal nations’ real shift and ramping up of economic development activity started happening about five years ago, she said.

“Some of the stuff is recession-proof that (tribes) are getting involved in,” Fitzpatrick said. “But I also think having a fundamentally different philosophy than the general business community, having a seven-generation philosophy embedded in your culture, allows you to think about things more long term instead of being really reactive in the short-term.” 

As tribes have fast-tracked non-gaming investments and projects during the pandemic, they also have encountered the same widespread challenges of high construction costs, sourcing talent and long material lead times.

“Our big construction company is running into this,” said Julio Martinez, CEO of Mno-Bmadsen, the Dowagiac-based non-gaming investment arm of the Pokagon Band of Potawatomi Indians. 

Mno-Bmadsen is looking at acquiring a construction company because executives can’t find enough workers for projects, Martinez said. The construction side of the company’s portfolio is also struggling from difficulties sourcing construction materials, and executives have turned to ordering materials immediately and buying property just to store it, Martinez explained.

High interest rates have also caused Mno-Bmadsen to pause acquisitions in 2022, instead leading the organization to reinvest in their current businesses. 

“Instead of overpaying for a new company, we’re investing inward to grow our companies,” Martinez said. “That’s the best place to put our new investment dollars for a little while.”

State, federal investments

Representatives from several state and federal agencies were also at the conference to discuss investments in tribal communities and to inform tribal leaders how to best leverage funding programs. 

The U.S. Economic Development Administration’s (EDA) investment in tribal communities in 2015 was “woefully low,” said Lee Shirey, an economic development administrator at the EDA. 

Since 2015, the EDA has invested $30 million to $40 million in Indian Country, Shirey said. In 2020, a federal rule change set aside funds for the first time for Native American communities, he said. Tribes are also 100 percent eligible for funds, while other groups applying for federal funds such as cities, townships and nonprofits have added criteria. 

At the state level, the Michigan Economic Development Corp. (MEDC) does not have set asides for tribal communities, but they meet many of the factors of eligibility to gain access to the funds, said Tom Durkee, tribal business development manager at the MEDC. 

“We realized we needed to be better connected to the tribes for several reasons. One of those reasons is because tribes tend to be the largest employers in the communities where they exist,” Durkee said.

Native-owned financial institutions also are working to fill in these gaps in resources for Native entrepreneurs and business owners. 

“We specialize in startups and a lot of the things your traditional lenders don’t want to do,” said Bill Beson, co-executive director of First American Capital Corp., a CDFI that focuses on Native entrepreneurs. “We’ll fill that gap, we’ll get that started and make that dream happen.”

Jeff Bowman, CEO of Green Bay, Wis.-based Bay Bank, said a lack of Indigenous representation at banking institutions is an ongoing problem that needs to be addressed. Bay Bank is one of 20 Native-owned banks in the country, and operates as a community bank, Bowman said.

“We not only run a community bank, we have a community bank run by Native people,” said Bowman said. “The day to day operation of the bank is to make sure we’re having an economic and social impact in tribal communities.”

Community banks can also focus on solving basic local needs such as housing, Bowman said. 

“Every tribal community that I go to, we all have housing shortages, we don’t have enough houses,” Bowman said. “That’s what a bank should be doing. We’re going to take some of this funding and re-grant it to the tribes.”

Hosted by Tribal Business News, the Great Lakes Tribal Economic Summit was the first conference of its kind to cover the tribal economy in the Great Lakes region. The event took place at Grand Valley State University in partnership with the university’s Seidman College of Business, MiBiz and the MEDC.

Read 2012 times Last modified on Friday, 07 October 2022 12:09
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