Summit focuses on economic development in tribal communities

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

The first Great Lakes Tribal Economic Summit was held October 6 in Grand Valley State University‘s Seidman College of Business in downtown Grand Rapids. The event included panel discussions between state and federal economic development officials and leaders of various Native American tribes in the Great Lakes region.

“As indefinite as the current economic climate is, the opportunities are incredible,” said Joe Schultz, CEO of Sault Tribe Inc., the independent business arm of 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 $3.2 million dividend to the tribe in 2021.

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

“We think we now have a very good foundation in the construction industry and in construction management,” Schultz said. “We take on challenges as they arise.”

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

“We generated $1 million through our partnerships with the cannabis industry last year,” Schultz said. “Every dollar we can pool in this way is a dollar 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 closures have caused tribes to focus more than ever on diversifying their businesses outside of gambling.

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 for diversifying the tribe’s assets. The tribe commissioned OEDMI to redevelop an approximately 20-acre site near Petoskey that once housed the Victories Casino.

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

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

“We really thought it would be good to try, and it’s going to be a good year for us,” Proctor said. “It fits the area well and makes the tribe look good.”

Seven generations, overcoming challenges

Terri Fitzpatrick, executive vice president, director of real estate and global attraction at the Michigan Economic Development Corp., said only a few tribes had an economic development branch a decade ago. The real change in tribal nations and the surge in economic development activity began about five years ago, she said.

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

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

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

Mno-Bmadsen is considering acquiring a construction company because executives aren’t finding enough workers for the projects, Martinez said. The construction side of the company’s portfolio is also struggling with the supply of building materials, and executives have turned to ordering materials immediately and buying a property just to store it, a explained Martinez.

High interest rates have also caused Mno-Bmadsen to pause acquisitions in 2022, instead causing the organization to reinvest in its current business.

“Instead of overpaying for a new business, we’re investing inward to grow our businesses,” Martinez said. “It’s the best place to invest our new investment dollars for a little while.”

State and federal investments

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

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

Since 2015, the EDA has invested $30 million to $40 million in Indian country, Shirkey said. In 2020, a federal rule change earmarked funds for the first time for Native American communities, he said. Tribes are also 100% 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) has not set aside for tribal communities, but they meet many eligibility factors to access the funds, said Tom Durkee, director of tribal business development at MEDC. .

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

Indigenous-owned financial institutions are also working to fill these resource gaps for Indigenous entrepreneurs and business owners.

“We specialize in startups and a lot of 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 Indigenous entrepreneurs. “We’re going to fill that gap, we’re going to start and make that dream a reality.”

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

“Not only do we run a community bank, we have an Indigenous-run community bank,” Bowman said. “The daily operation of the bank is to ensure that we have an economic and social impact in the tribal communities.”

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

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

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