Overcoming Challenges to Business and Economic Development in Indian Country. Types of Tribal BD/ED Activities

08/01/2004

The tribes/Native corporations in the study have developed a wide range of BD/ED activities, generally building their efforts on their natural resources and other favorable conditions such as a location near tourism/recreation attractions (national parks and monuments, hunting, fishing, and skiing). The tribes participating in the study developed businesses in the service sector (gaming, tourism, banking, information technology, retail sales), construction, manufacturing, and natural resource exploitation (mining, forest products, farming).

Gaming. All but one of the tribes in the study operate gaming facilities (only Navajo Nation does not).(3) The scale of these gaming operations and their importance to tribes has ranged from substantial (more than $50 million a year) to modest (less than $1 million a year). Gaming profits have transformed the economies of some tribes (Gila River, Cheyenne River Sioux); for other tribes (Citizen Potawatomi, Colville, Three Affiliated Tribes, Turtle Mountain Chippewa), gaming has produced significant profits that have boosted, but not transformed, their economies. Interestingly, because the tribe had already approached full employment and was operating many successful businesses, Mississippi Choctaw's large and profitable gaming operations have produced less dramatic effects than otherwise would have occurred.

Tourism and Recreation. Each of the tribes in the study had some type of tourism/recreation operation. In about half the instances, these operations were tightly bundled with gaming, and in about half, tourism operations were only loosely connected to tribal gaming. For example, both Choctaw and Gila River are constructing "four-star" hotels with conference centers, restaurants, golf courses, and other attractions to complement their gaming operations. Three Affiliated Tribes is coordinating tourism-related activities with its gaming operations, including a new cultural interpretation center  a $12 million investment.

Not all tribal tourism activities are associated with gaming. Navajo Nation draws tourists to national monuments and other scenic attractions on the reservation; Cheyenne River Sioux, Colville, and Three Affiliated Tribes operate campgrounds and marinas on their reservations. Citizen Potawatomi operates a golf course and bowling facility, but unlike Choctaw and Gila River, the Potawatomi golf course is not closely tied to its more modest gaming operation. Doyon Tourism, Inc., owned by the Doyon Corporation, operates a roadhouse, Denali River Cabins, and Kantishna Wilderness Trails.

Information Technology. One of the Alaska Native corporations and three of the tribes in the study have established high levels of development in the information technology sector. In each case, development was stimulated by advances in other sectors. For example, at Gila River, the need for telephone service, the growth and development of three casinos, and construction of hotels created the need for sophisticated telecommunication and computing resources. Leveraging these needs, the tribe developed Gila River Telecommunications, Inc. (GRTI), which has installed fiber optic cable to support high-speed, high-bandwidth Internet access and other services to businesses and residences on the reservation. In addition, GRTI is a minority owner in Gila River Cellular General Partnership, which provides cellular access to rural areas in Arizona.

Both the Bristol Bay Native Corporation and the Mississippi Choctaw tribe acquired information technology companies as part of their economic expansion and diversification activities. Bristol Bay created Vista International in 1998 and acquired SpecPro, Inc. in 2001. Vista International was started to provide IT support for the USDA's Foreign Agricultural Services, and its clients include the Department of Defense and each military service. SpecPro provides system engineering and other services to federal agencies and private-sector clients in 13 states and participates in the SBA 8(a) program. Mississippi Choctaw recently acquired Applied Geo Technologies, Inc., which provides digital mapping, aerial and satellite imagery production services.

Construction. Both Alaska Native regional corporations and two of the tribes in the study have developed a strong presence in the construction sector. The Colville tribe has several companies engaged in construction projects that include building of roads and highways; building of septic systems; and shoreline stabilization, conducted for federal agencies by a company that participates in the SBA 8(a) program. Much of Three Affiliated Tribes' current BD/ED centers on construction, including a gravel processing plant, road construction and improvement, an oil refinery, expansion of tribal housing, enhancement of the Fort Berthold rural water system, and expansion related to Four Bears Casino (including apartments, a lagoon bed with a boat ramp, an amphitheater, and expanded RV parking) and a community center (including a gymnasium).

Environmental engineering and construction has been one of the most profitable investments made by Bristol Bay Native Corporation (BBNC) through its wholly owned subsidiary Bristol Environmental & Engineering Services Corporation (BEESC). The major resources of the BBNC region include commercial fishing (the Bristol Bay area has one of the world's greatest salmon and herring fisheries) and hunting. However, BBNC derives the bulk of its revenues from asset management (the corporation is an investor in a diversified portfolio of stocks and bonds), and earnings of wholly owned environmental engineering and information technology firms. Nevertheless, the status of the natural resources of its region does affect BBNC. When the Bristol Bay fisheries were prosperous, many BBNC shareholders opposed oil and gas exploration, fearing damage to the fisheries, and the corporation eschewed investment in it. However, in recent years, a dramatic decline in the fisheries has occurred. Since the decline in Bristol Bay fisheries, BBNC shareholders have expressed support for oil and gas exploration, and the corporation is working with the State of Alaska to sell leases to extract the subsurface oil and gas.

Manufacturing and Industrial Parks. One of the Alaska Native corporations (Bristol Bay) and four of the tribes in the study have established high levels of development in the manufacturing sector. Located in east-central Mississippi, the Choctaw tribe began its modern BD/ED initiatives in 1969 using federal funds and a local bond issue to develop an industrial park. The tribe was able to induce two private-sector firms (General Motors and American Greeting Cards) to build manufacturing facilities in its park. Other study tribes (Gila River and Cheyenne River Sioux), aware of the success of the Choctaw, have built industrial parks. Three Affiliated Tribes, working with Northrop Grumman, Inc., has a plant that manufactures aircraft parts on the Ft. Berthold Reservation. The tribes also operate two building construction companies (Ft. Berthold Development Corporation and Twin Buttes Custom Homes, Inc.).

Mississippi Choctaw has one of the most successful tribal BD/ED programs, and the tribe's initial modern BD/ED efforts focused on manufacturing. Tribal officials attribute much of their success to their manufacturing operations, which include separate companies making automobile loudspeakers and wiring harnesses and a custom plastic molding manufacturer (Table 3.1).

Table 3.1.
Mississippi Choctaw Manufacturing Companies
Company Annual Sales Workforce Description
Choctaw Electronics Enterprise $40 million 225 Automobile loudspeaker manufacturing, joint venture with Harmon Becker International; plants in the USA and Mexico
Choctaw Manufacturing Enterprise $20 million 370 Automotive wiring harness assembly
First American Plastic Molding Enterprise $10 million 220 Joint venture with Quad, Inc., with plants in Michigan, Illinois, and Texas

Resource Utilization and Management. Each of the study tribes and Native corporations extracts or harvests and sells minerals, crude oil, or forest/agricultural products. Four of the tribes/Native corporations have businesses that sell timber and forest products and/or operate sawmills. For example, Colville, with 700,000 acres of forests, initially sold raw lumber, subsequently acquired a sawmill, and now manufactures a variety of forest products. Mississippi Choctaw, Navajo Nation, and Doyon, Ltd. harvest timber and sell forest products.

One tribe and one Alaska Native corporation have major mineral extraction activities. Navajo Nation mines coal and uranium, often through leases to private-sector companies. Navajo Nation is a major supplier to coal-fired electricity generators in the Southwest. Doyon, Ltd. owns Doyon Drilling, Inc. (DDI), which provides services to oil and gas extraction companies and operates five rigs on the North Slope of Alaska. Its equipment includes some of the most technologically advanced land drilling rigs in the world. Three Affiliated Tribes is building an oil refinery on its lands. In recent years, the Colville tribe, with funding and technical assistance from the Energy Department Green Tag Program for renewable energy production and from the USDA, implemented an innovative co-generation plant that burns sawdust, a byproduct from nearby sawmills, to generate steam. The Colville plant uses steam-driven turbines to generate electrical power.

Farming and ranching are important businesses for each of the tribes in the study. In most cases, these are done by individual tribal members on allotted lands or using permits issued by the tribe. However, in some cases, the tribe owns the businesses. For example, Citizen Potawatomi recently purchased a farm to grow vegetables, which the tribe sells in its supermarket.

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