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SNEEK PEEK: Native Business Magazine - March 2019
Lance Morgan, CEO, Ho-Chunk, Inc.
PHOTO BY AP PHOTO/NATI HARNIK
LANCE MORGAN on Ho-Chunk, Inc's 25-YEAR HISTORY OF GROWTH
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By Andrew Ricci
Lance at the groundbreaking ceremony for the new mixuse commercial and residential buildings at Ho-Chunk, Inc.’s Flatwater Crossing master-planned community in South Sioux City, Nebraska, Dec. 5, 2018.
PHOTO COURTESY HO-CHUNK, INC.
Tenth graders in the Winnebago Public School Academy, a projectbased classroom where students take advanced-level courses, visited the Ho-Chunk, Inc. corporate office in December 2018. They learned about the company through a scavenger hunt and discussion with CEO Lance Morgan.
PHOTO COURTESY HO-CHUNK, INC.
An aerial overview of Ho-Chunk Village
PHOTO COURTESY HO-CHUNK, INC.
Lance Morgan was 25 years old when he was tasked with taking $9 million and figuring out how to diversify the Winnebago Tribe of Nebraska’s economy away from gaming.
Now, two and a half decades later, the company that Morgan started with one employee and $9 million in seed capital is Ho-Chunk, Inc., a Tribal success story that currently boasts annual revenues of roughly $250 million, more than a thousand employees, and multiple subsidiaries across four major division areas.
Morgan didn’t spend his entire life on the reservation. His father was a non-Indian farmer and his mother was a Tribal member, but when they got married in the 1960s, it was a little bit controversial, he told Native Business Magazine. So, they left. His father went to Vietnam, and when he returned, they settled in Omaha, where Morgan’s grandparents eventually moved as well.
“We had a little Tribal thing going on in the city, like a lot of people did,” Morgan said in an interview. “But gradually, my entire family moved back to the reservation, including myself.”
Morgan joined the Army Reserves in order to pay for college at the University of Nebraska, where he did well enough to get a full scholarship to Harvard Law School. After graduation, he started a successful legal career at Dorsey and Whitney, a prominent law firm in Minneapolis.
At that time, back on the reservation, the Winnebago Tribe was going through a dispute with its casino’s management company.
“We were paying our management company 40 percent,” Morgan said. “We put up most of the money for the casino, and they.... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
THE ROAD TO NOWHERE
Substandard road conditions on reservations across the United States impact the quality of life for Tribal citizens and inhibit the economic development and selfdetermination of Tribal Nations.
Photo by Suzette Brewer
How the Lack of Adequate Transportation Systems Hinders Tribal Economic Development
By Suzette Brewer
PHOTO BY KEN CEDENO/ GETTY IMAGES VIA CORBIS NEWS
Arlando Teller’s earliest memory of the roads on the Navajo Nation is riding to market with his grandparents in their ’46 Ford pickup truck on the jagged, unpaved trails of Del Muerto, Arizona in the late 1970s.
“I always remember that truck,” says Teller. “It was this big, heavy tank on a very rut-riven, rocky dirt road with my dad’s parents. It was always a very difficult drive― — especially if it had rained or if there was bad weather.”
Today, some 40 years later, Teller says the roads in Del Muerto are exactly the same as they were when his grandparents lived there.
“It hasn’t changed at all,” says Teller, who is now the deputy director of the Navajo Nation Department of Transportation. “In fact, we still have thousands of miles of roads on the reservation that are unpaved and sometimes impassable, which we are working hard to address. But there is a lot of unmet need in regards to roads, bridges, school bus routes and airports, and all of it has an impact on our Tribal members.”
Teller’s anecdote is recognizable to nearly every land-based reservation Tribe in the United States, many of whom continue to struggle with a lack of paved roads and basic transportation infrastructure like curbs, sidewalks, signage, guardrails and proper drainage. This dearth impacts the quality of life and hinders crucial economic development that mainstream communities take for granted.
With approximately 17.5 million acres covering 27,000 square miles in Arizona, New Mexico and Utah, the Navajo Nation is the largest land-based Tribal Nation in the country. Slightly larger than West Virginia, the Navajo Nation’s roadway inventory includes 14,221 miles of roads with a patchwork of ownership between the Bureau of Indian Affairs (BIA), the Tribe, the three states and the counties, according to the Navajo Nation Department of Transportation.
On the Navajo Nation, only 23 percent — or 3,270 miles — are paved. By comparison, West Virginia, which is the fourth poorest state in the country with a poverty rate of 17.7 percent, has approximately 27,000 miles of paved roads, according to the West Virginia Annual Roadway Statistics Report.
And because of the high desert topography of the Navajo reservation, factors like rain, snow, floods, dust storms and landslides render many of these routes hard to navigate and sometimes impassable. These treacherous situations affect public safety, the delivery of essential services, and access to employment and healthcare.
Moreover, it inhibits access to education for the thousands of school children in Navajo communities where road conditions have created transportation-related attendance barriers throughout the reservation. Taken together, these factors, say Tribal leaders, present a major challenge to the development of the Navajo Nation economy.
Out of Sight, Out of Mind
The lack of basic infrastructure in Tribal communities has been an ongoing problem since the establishment of the reservation system by the federal government in the mid-1800s. As the expansion of wagon trails, railroads and white settlers exploded westward, Tribes were forced onto reservations that were, in reality, little more than prison camps — substandard, inarable parcels that were located on flood plains, in dry deserts, or rocky, untillable hill country mostly unfit for food production.
When food, medicine, blankets and housing promised to Tribal communities never materialized, they were forced to live in cramped, cold, unsanitary conditions that led to hunger and disease. Under 24-hour armed military guard, Tribal members were forbidden from leaving to hunt or find food. This led to riots and uprisings at reservations across the Northern Plains and the Upper Midwest. In the case of Fort Peck, Montana, over 300 Assiniboines died of starvation in the winter of 1881.
Since then, Tribal leaders, historians and advocates across the country contend that the consequence of early policies intended to geographically and politically isolate Indian Tribes has also crippled Native economies to this day. And one of the centerpieces to achieving those ends was limited access to road systems on and near Indian lands. ... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
Dual Taxation Is Costing Tribal Nations Billions of Dollars in Tax Revenues
By Andrew Ricci
Mark Fox, Chairman of the Mandan, Hidatsa, and Arikara (MHA) Nation
Photo by Tom Stromme/The Bismarck Tribune and Licensed Via AP
Mark Fox, Chairman of the Mandan, Hidatsa, and Arikara (MHA) Nation, sees a gross inequity in how the state of North Dakota taxes the energy ventures that are occurring on the MHA Nation’s Fort Berthold Indian Reservation, which sits directly on top of North Dakota’s lucrative Bakken Shale Formation.
For one, he says, the dual taxation system in which the state levies a tax in addition to that levied by the Tribe is an impediment to economic development.
“Whether the tax is going on fossil fuel resources, on our joint ventures with industry partners, or on commercial developers coming on to our reservation to try and stimulate our economy, the fact is that an entity in addition to the Tribe is taxing the operation of that proposed development,” Fox said in an interview with Native Business Magazine. “When it’s lingering out there at the outset, it’s really difficult for joint ventures to occur.”
As an example that hits particularly close to home, he cites Fort Berthold’s booming oil and gas industry.
“If we have two sets of taxation systems, let’s say one is 10 percent and the other one
is 10 percent, oil and gas developers are going to see 20 percent and say ‘I can’t make a net revenue on this, I can’t make a go of it, my numbers don’t crunch out,’” Fox said. “So they take their dollars and put them somewhere else where they’re not going to be impacted to that level.”
Dual taxation systems also prevent Tribes from becoming the primary beneficiaries of the tax — which he says undermines the fundamental purpose of tax systems.
“You’ve got to have taxes because you have taxable activity, tax revenue, and programs and services that are dedicated to that taxable activity,” Fox said. “With alcohol sales, for example, that’s a taxable activity, and with that tax revenue you create saturation patrols for law enforcement, domestic violence responses, crimes and violence, treatment programs — all of those relate to that activity of selling alcohol on the reservation.”
“When the state taxes alongside the Tribe, or at the same time as a Tribe, then there’s dual taxation,” he continued. “The money simply goes away to the state, and you don’t get the programs that come back to that taxable activity.”
In other words, dual taxation hits Tribes in two ways. The high rate that occurs when a tax is levied by both the Tribe and the state is an impediment that blocks economic development from happening in the first place. And the amount taken by the state — which should be reinvested in services related to the taxable activity — is siphoned off and used for other purposes far from the reservation. ... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
AMERIND Risk Expands
Newest product lines include auto insurance and cyber liability
By Mark Fogarty
Photo Courtesy of AMERIND RISK
AMERIND Risk, the only Tribally-owned insurance provider serving Indian Country, has been expanding its protection of Tribes, their businesses and their employees with new product lines.
AMERIND Risk launched its latest programs, Tribal commercial auto coverage and cyber liability insurance, in May of 2018.
These expansions add to the reach of the insurer, which was started more than three decades ago in response to a crisis in housing insurance. The company, now based on the Santa Ana Pueblo in New Mexico, employs about 50 people.
AMERIND Risk was begun in 1986 in the housing arena when commercial property insurance for homes on reservations became prohibitively expensive, according to Chief Executive Derek Valdo (Acoma Pueblo). AMERIND was started through efforts by the National American Indian Housing Council and the federal Department of Housing and Urban Development (HUD) to get Tribes to band together to self-insure.
Valdo tells Native Business Magazine that hundreds of Tribes responded to start AM- ERIND after the cost of insuring HUD’s
Tribal housing portfolio jumped from $5 million for three years to $15 million for one year. AMERIND now has 430 Tribal members that make up the backbone of its philosophy, “Tribes Protecting Tribes.”
“No other insurance entity wanted to work with residential property coverage in Indian Country,” Valdo says. About 70-80 percent of Indian Country was rated a “10” for risk by the insurance industry, and 10 is the worst rating. Insurers were interested in Tribal gaming operations, but not housing, he says. .... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
Tribal Construction Enterprises
Cash In on Lucrative Federal Contracting
By Lynn Armitage
GTEC provided design and construction management services to enhance the arrival and parking experiences at Turtle Creek Casino and Hotel, a primary tourism draw for Traverse City, Michigan.
Photo Courtesy Team Elmer's
GTEC was hired to provide construction management services to reconstruct part of the M-72 corridor - a major roadway in the heart of Michigan.
Photo Courtesy Grand Traverse Engineering and Construction
In January, GTEC added Bay Shore Steel Works (BSSW), a longtime manufacturer of steel and aluminum, to its portfolio of Tribal 8(a) companies.
Photo Courtesy Bay Shore Steel Works
The United States government doles out $500 billion each year to buy the goods and services it needs to keep the country running smoothly. That’s a staggering amount of money enriching businesses fortunate enough to land these coveted contracts. And thanks to the Tribal 8(a) Program, Tribal enterprises can dip into the honeypot of government contracting, too.
According to the Congressional Research Service, the Tribal 8(a) Program is a special provision to the Small Business Investment Act of 1958 that gives eligible Alaska Native Corporations, Tribes, Native Hawaiian Organizations and Community Development Programs an exclusive stronghold to compete more advantageously in the federal marketplace through set-aside (only certain contractors may compete) and sole-source (without competition) awards.
The idea behind this business development program, managed by the Small Business Administration, is that it gives qualifying Tribal enterprises the opportunity to generate much-needed revenue to fight poverty and promote economic development in their disadvantaged communities.
As the Native American Contractors Association (NACA) says, “The Native 8(a) Program is a hand up, not a hand out.” Both NACA and the National Congress of American Indians acknowledge that the Tribal 8(a) Program has a few legislative bugs to .... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
Call to Arms:
The Attack on Economic Arms of Tribes andSovereignty
By Andrew Ricci
Photo Courtesy iStock by Getty Images
According to Pilar Thomas (Pascua Yaqui), a lawyer in Lewis Roca Rothgerber Christie LLP’s Indian Tribal Nations Practice, there are only three ways a Tribe can raise revenue for Tribal governmental purposes.
One way, she says, is like any other government — through the assessment and collection of taxes. A second way is through grants and contracts with federal or state governments. And a third way is through Tribal enterprise revenue.
Maranda Compton (Delaware Tribe of Indians)
PHOTO COURTESY MARANDA COMPTON
Pilar Thomas (Pascua Yaqui)
PHOTO COURTESY PILAR THOMAS
“But the challenge for Tribes is that unlike other governments, from a tax perspective, Tribes really lack, in many circumstances, an economic base to tax,” Thomas said in an interview with Native Business Magazine. “There just isn’t a lot of economic activity on the reservation that you can tax.”
Maranda Compton (Delaware Tribe of Indians), a partner at Van Ness Feldman LLP, adds that because Tribal lands are held in trust by the federal government, property taxes are largely unavailable, so the typical land-based tax regimes that states and municipalities employ are also difficult to implement in Indian Country.
“The idea that tax revenue could fund Tribal governments — like other governments are funded — is just not there,” Compton said. “In light of that, Tribes must rely heavily – and sometimes almost exclusively — on commercial development to fund their basic governmental services.”
To address this issue, Congress has sanctioned the formation of Tribal Corporations and Tribal Business Enterprises.... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
Data Centers:
A GOOD INVESTMENT OR RISKY BUSINESS?
By Lynn Armitage
Data Holdings is a $36 million Tier 3+ data center built by the Forest County Potawatomi tribe in 2013.
Photo Courtesy Data Holdings, Potawatomi Business Development Corporation
Kurt O'Bryan, CEO of the Potawatomi Business Development Corporation
Photo Courtesy Kurt O'Bryan
Data centers are big business. According to MarketWatch, the global data center market is estimated to reach revenues of around $174 billion by 2023.
Is it any wonder that many Tribes are wanting a small slice of that big pie?
A data center, or “colocation facility,” is a very large, windowless space―some the size of many city blocks―where digital data is stored in a secure, cool, windowless area. Businesses will rent space at data centers for their servers and computing equipment because they offer fast connectivity, cooling, backup power and 24/7 security at a rate far less costly than if they built their own data storage facility.
Even tech giants like Google and Microsoft are partnering with data centers all over the world for auxiliary data storage space, as the Cloud in the sky does have its limits. Mind-boggling as it is, Digital Trends reports that every day, around 2.5 quintillion bytes of data are created by 3.7 billion Internet users.
While the demand for data storage solutions is high, running a data center is not a business every entrepreneur can jump into, as the barrier to entry is also very high―particularly start-up costs―and it could be a long time before you see a healthy ROI.
Even so, some Tribes have bravely ventured into this market space. Native Business Magazine has reached out to a few to see if they have discovered whether data centers are a good investment or risky business.
First Native-owned Data center in Wisconsin
About 8 years ago, the Forest County Potawatomi Tribe in Milwaukee, Wisconsin, saw an emerging trend and pounced on it. “We noticed a significant number of data centers being built here in the U.S. and internationally,” explains Kurt O’Bryan, CEO of the Potawatomi Business Development Corporation, the Tribe’s investment division. A market study revealed that Southeast Wisconsin did not have a Tier III data center and the Milwaukee business community was underserved, as well. “We also identified a lot of interest from the Native American community,” he recalls.
Two years later in 2013, the Potawatomi Tribe opened Data Holdings on Tribal lands in Milwaukee―a two-story, 46,000-squarefoot Tier III facility, with scalability for an additional 40,000 square feet, giving them plenty of room to grow and acquire new tenants. When all phases are completed, the total cost of construction is estimated to be $36 million.
To date, Data Holdings services about 130 clients, including major corporations, state governments and other Native American Tribes. O’Bryan cannot name their clients specifically due to privacy concerns―“They don’t want people to know where their data is,” he explains. But he can divulge that the company’s largest client is the State of Wisconsin. And of course, the Potawatomi Tribe is on board, too. ... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
YAKAMA POWER:
How One Tribe Secured its own Energy Future
Yakama Power linemen reconnect 83 new customers who came to the company from another utility firm operating on the reservation.
Photo Courtesy Yakama Power
By Debra Utacia Krol
Yakama Power provides much more than just electric, high-speed internet and phone service to the sprawling Yakama Nation. The Tribally-owned company is also building a thriving, sustainable economy by providing Tribal members with stable, high-paying jobs and patronizing Tribal businesses.
In 2004, Yakama staff member Ray Wiseman was given a new assignment — create a Tribal utility company. Wiseman, who started with the Tribe as a forester, had been working on a project to install a wide area
network to connect various government entities. “I became the GIS [geographic information system] manager and then the data manager,” he says. “We were installing fiber optics.”
The Yakama Tribal Council was also concerned about how to create jobs on its 1.4-million-acre reservation. “In 90 years of receiving electric service, no Tribal member had ever been employed by the power utilities,” says Wiseman. In addition to the high wages earned by electrical workers — Wiseman says that the base salary for a lineman.... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
TULALIP UTILITIES:
Water Rights Pave the Way to Clean Water
By Renae Ditmer
Tulalip Utilities provides water and water treatment for 1,800 residences on the reservation, plus a plethora of businesses that lie within it: Walmart, Cabela’s, Home Depot, McDonald’s, a mall, several banks, and three casino-hotels. Here is an Aerial View of Tulalip Utilities Wastewater Plant, Mission Bay.
PHOTOS COURTESY CHRISTOPHER WRIGHT, TULALIP DATA SERVICES
Tulalip Utilities provides water and water treatment for 1,800 residences on the reservation, plus a plethora of businesses that lie within it: Walmart, Cabela’s, Home Depot, McDonald’s, a mall, several banks, and three casino-hotels. Here is an Aerial View of Tulalip Utilities Wastewater Plant, Mission Bay.
PHOTOS COURTESY CHRISTOPHER WRIGHT, TULALIP DATA SERVICES
Tulalip Utilities provides water and water treatment for 1,800 residences on the reservation, plus a plethora of businesses that lie within it: Walmart, Cabela’s, Home Depot, McDonald’s, a mall, several banks, and three casino-hotels. Here is an Aerial View of Tulalip Utilities Wastewater Plant, Mission Bay.
PHOTOS COURTESY CHRISTOPHER WRIGHT, TULALIP DATA SERVICES
On a semi-urban reservation located on 22,000 acres adjacent to both Everett, Washington, and Marysville, Washington, Tulalip provides water and water treatment for 1,800 residences on the reservation, plus a plethora of businesses that lie within it: Walmart, Cabela’s, Home Depot, McDonald’s, a mall, several banks, and three casino-hotels.
Even before “mni wiconi” became the watchword for the importance of water for life, Indian Country was awash in water issues. While the rate of Native homes without access to safe water supply and/or waste disposal facilities dropped from 12 percent in 2007 to 6.5 percent in 2016 (compared to 1 percent of non-Tribal homes), an amalgam
of issues, stemming from climate change and big ports and industry along the coasts, now threaten to reverse this progress.
Worse, “Some Tribes have not yet secured their water rights,” lamented Karletta Chief, Associate Professor & Extension Specialist, Arizona State University. This is due to very costly litigation and lack of funding to implement infrastructure.
Not so for the Tulalip Tribes in Washington state who “are making moves for clean and safe drinking water for the reservation for the next 100 years,” according to Mike Leslie, Tulalip Utilities Authority Manager, Water and Wastewater.
Until 2014, Tulalip used only ground water for all uses within its boundaries. But in 2014,
it finally negotiated its water rights — and a contract — with the City of Everett, gaining the right to 32 million gallons of clean water per day from Everett from 2016-2066.
Yes, you read that correctly. But they can’t possibly use, or distribute, it all — not yet, anyway. Daily usage, and Tulalip infrastructure and operational capacity, is between 800-900,000 gallons of water.
Currently, the Tribe owns and operates all infrastructure from Everett’s boundary to the reservation, and monitors the quality of water delivered from Everett. Tulalip also has had a ground water system operation for 50 years. The Tribe uses it to supply the “back side” of the reservation, where infrastructure does not yet reach. The Tribe also treats all the ground water and conducts all operations and maintenance in accordance with Environmental Protection Agency (EPA) regulations under its Tribal water quality assurance plan. .... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
WHEN 19 PUEBLOS UNITE - ECONOMIC DEVELOPMENT OPPORTUNITIES ARE EXPONENTIAL
By Native Business Staff
The interior of the Starbucks at Avanyu Plaza features Pueblo inspired architecture and handmade Pueblo pottery and art.
PHOTO BY ASHLEY BROWNING, COURTESY IPMI
The interior of the Starbucks at Avanyu Plaza features Puebloinspired architecture and handmade Pueblo pottery and art.
The land once home to the Albuquerque Indian School (AIS), a boarding school that operated 1881-1981, is today the site of a thriving business and cultural complex owned by 19 Pueblos of New Mexico.
The story of how the Pueblos jointly built a sovereign, economic ecosystem in Albuquerque begins back in 1969 — the first time that the 19 Pueblos petitioned the federal government to convey land to Pueblo ownership. The Pueblos sought to turn an unused portion of AIS property into a cultural center. Feasibility studies, economic assessments and appraisals were conducted. Letters of support from municipal, state and federal legislators were garnered. The Pueblos identified the specific ways they intended to develop the land to create economic and cultural opportunities that would benefit tourism and commerce for the 19 Pueblos, City of Albuquerque and the State of New Mexico.
Fast forward to 2019, and the 19 Pueblos have successfully petitioned for.... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
The Wildflower team with Silent Falcon Drone
PHOTO BY EDDIE MOORE, ALBUQUERQUE JOURNAL
AN EAGLE EYE VIEW Over New Mexico
By Renae Ditmer
There’s a reason that New Mexico is called The Land of Enchantment, because sometimes magic happens. Just ask Governor Joseph Talachy of the Pojoaque Pueblo and Kimberly deCastro, owner of Wildflower International.
Looking to expand in an increasingly competitive but less lucrative federal IT contracting world, deCastro was seeking a related intrusive market sector that would allow her company to survive into the future. At the same time, Governor Talachy was brainstorming economic development opportunities that offered rewarding job prospects for its 482 enrolled members and surrounding community.
It was a marriage made in business heaven: Pojoaque’s almost 12,000 acres of real estate and highly varying and inaccessible topography, combined with Wildflower International’s partnership with Unmanned Aircraft System (UAS or drone) manufacturer Silent Falcon. Pojoaque needed the surveillance capability, and Wildflower needed to train drone pilots over more challenging and realistic terrain. In this marriage, deCastro was the one to propose the partnership. She originally sought a deal to use the Pueblo’s Santa Fe Downs to train the 14-foot fixed wing span, solar-powered aircraft with a 4- to 8-hour flight-life close to Albuquerque. In exchange, Silent Falcon would train Tribal members as future drone pilots for federal contracts. Pojoaque would gain high-tech jobs in high demand, and Wildflower qualified pilots that would allow it to compete for federal contracts the Pueblo pilots would staff. Win-win. The Governor was all in.
However, they quickly ran into a wall of Federal Aviation Administration (FAA) regulations. Undeterred, and armed with Tribal sovereignty and a bent for self-determination on both sides, they looked at that fourby-six-mile piece of trust land the Pueblo inhabited as Plan B. .... Read the Full Story by subscribing to the Digital Version of Native Business Magazine.
