OCTOBER 2007: COVER STORY, TRIBAL ECONOMIES
TRIBES
2.0
As the next decade unfolds, the nine federally recognized
tribes in Oregon will have a major role in how the economy of
the state develops. It’s not just about casinos anymore.
By Abraham Hyatt
It’s a summer day in Canyonville about a half hour south
of Roseburg, and the Cow Creek Tribe is pretending their new
dam is about to collapse.
It’s one of the biggest dams in Douglas County: 1,000
feet long, 95 feet high and capable of holding back 119 million
gallons of water. It spreads across the mouth of a canyon that
sits above I-5 and several million dollars worth of tribal
enterprises: the Seven Feathers casino, a motel, an RV resort,
a truck stop, a restaurant and self-storage units. The drill
spreads quickly via radio and cell phone from the base of the
dam to the floor of the casino.
This is not the tribe’s only dam. Further back in the
canyon sits a smaller companion dam. And another reservoir. And
a gray-water lagoon. Nearby sits a water treatment plant,
storage tanks, a sediment basin — all part of a $25
million, 250-acre utility project that, come this winter, will
supply the tribe and, in emergencies, the city of Canyonville
with water.
“There’s something called justice, but
you have to do something to achieve that. You have
to work to make this growth happen.”
ANTONE
MINTHORN, UMATILLA TRIBAL CHAIRMAN
PHOTO BY LEAH
NASH
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“Sewer, power, water: We’re working toward total
self-sufficiency,” says Wayne Shammel, the Cow
Creek’s lawyer, as he drives past workers involved in the
drill on the dusty road that follows the rim of reservoirs.
The recently completed project was built on the success
of the tribe’s casino and resort. And while the casino
will remain its crown jewel for years to come, Cow Creek
— like many tribes around Oregon and the nation —
is rapidly moving beyond a gaming-based economy.
It’s a transition that requires quick learning. Fifteen
years ago, Cow Creek was the only tribe in Oregon with a gaming
facility. Now the tribe owns and operates 12 separate companies
and is the second-largest employer in the county. Its members
are learning the intricacies of running a municipality-sized
utility. And the tribe is learning that its successes can draw
political ire from the local community.
Their growth and push for economic diversity — also
typical of other tribes in the state — shows no signs of
slowing. Economists hired by the tribes say tribal gaming alone
had an almost $1.5 billion economic impact on Oregon in 2005.
But that’s just casinos. Last year the Coquille Tribe
teamed up with Home Depot on a $20 million shopping center. The
Confederated Tribes of the Umatilla Indian Reservation have
attracted two Fortune 500 companies to a new business park a
few miles outside of Pendleton. Smaller examples at other
tribes abound.
When Antone Minthorn, chairman of the Umatilla board of
trustees, says, “We are on the cutting edge of economic
development in rural Oregon,” there’s evidence to
back up that claim.
Oregon state economists have no estimates or data to determine
what impact tribal economies as a whole have today. But
it’s clear that as the next decade unfolds,
Oregon’s nine federally recognized tribes won’t
just be shaping the future of their children, grandchildren and
culture. They’ll have a major role in shaping the
economic future of the state.
OREGON TRIBES ARE NOT
UNIQUE in their push to diversify. It’s a shift
that some tribes across the country are making very
successfully. Last year the Seminole tribe of Florida made
international headlines when it announced it was buying the
Hard Rock chain of casinos and hotels for about $965 million.
The Southern Ute tribe in Colorado is worth nearly $4 billion,
in part because it controls the distribution of roughly 1% of
the nation’s natural gas supply. In Washington State, the
Puyallup Tribe is replacing a riverboat casino in Tacoma with a
$300 million international shipping container terminal.
“Sewer, power, water: We’re working
toward total self-sufficiency.”
WAYNE
SHAMMEL, COW CREEK GENERAL COUNSEL, AT THE
TRIBE’S MAIN RESERVOIR
PHOTO BY JON
MEYERS
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Economists and the tribes agree that nearly all growth can be
traced back to a 1987 ruling by the U.S. Supreme Court, which
decided that tribal lands did not fall under state gambling
laws because of the sovereignty of the tribes. Consequently,
they could build casinos. Using gaming money as a springboard,
tribes bought and created businesses.
The same court first established tribal sovereignty in the
1880s. Despite that promise, the federal government spent the
ensuing decades attempting to force assimilation on American
Indians. In the 1950s, 109 tribes — 62 of which were in
Oregon — were dissolved or had their land taken away. In
Oregon, like many other states, it was the culmination of more
than 100 years of forced relocation and land theft.
By the 1970s and 1980s, legal action, political pressure and
sometimes-violent protest — along with a changing
national attitude toward civil rights — led to a shift in
federal and state positions. Through legal battles, some Oregon
tribes regained federal recognition. Some received money for
lost land. Some even had land returned to them. Employment and
poverty rates were still tragically low. But now the tribes had
a way to address that.
The Cow Creek Tribe
opened its first gaming facility in Canyonville in 1992. It
was replaced a few years later
with the
Seven Feathers Hotel and Casino Resort, which has grown to
1,300 gaming machines and more than 50,000 square
feet of casino space.
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Four years after the Supreme Court’s 1987 gaming
decision, the Cow Creek took out an $825,000 loan from the
Bureau of Indian Affairs and built a tin-sided bingo hall. It
was the first in Oregon, but not for long.
In 1994, the Umatilla opened a casino outside of Pendleton.
The year after that, the Confederated Tribes of Siletz Indians
(Lincoln City), the Confederated Tribes of Warm Springs (Warm
Springs), the Confederated Tribes of Grand Ronde (Grand Ronde)
and the Coquille (North Bend) all opened casinos.
Today, Oregon’s nine federally recognized tribes all
have casinos.
In 2005 those casinos had a direct $675 million effect on
Oregon’s economy, according to a study by the economic
consulting firm ECONorthwest that was commissioned by the
tribes. Add in the impacts to the construction, manufacturing,
wholesale, retail and services industries and the number jumps
to $1.47 billion.
That’s nearly the combined economic force of
Oregon’s wine and dairy industries.
THE IMPACT OF TRIBAL
ECONOMIES as a whole, versus simply the impact of
casinos, is harder to quantify. Because the tribes are
sovereign entities, the state doesn’t compile its own
data, says Jill Mills, the national business development
officer for the Oregon Economic and Community Development
Department (OECDD).
Some tribes have done their own county-specific studies. The
Cow Creek estimates it had a $142 million overall impact in
2006 in Douglas County. The Coquille says its businesses had a
nearly $53 million impact in Coos County.
Many tribes, however, won’t reveal anything about their
financial affairs. Until 2005, Mike Burton was assistant
director at OECDD. Now he’s the director of the
Affiliated Tribes of Northwest Indians’ economic
development corporation. He says one reason for the secrecy is
a fear that if communities begin to think that the tribes are
flush with cash, they’ll shut down services or schools
near tribal lands in hopes that the tribes will take up the
slack with their own programs.
But even without hard data, it’s still possible to
quantify some aspects of the effect tribes have on the state.
One way is to look at the number of jobs created, almost all of
which are in areas with high unemployment. According to state
data, Oregon’s tribes employed 2,200 people in January
1995; in July of this year, the number was 8,700.
An equally important indicator, says Burton, is the scope of
tribes’ economic investments. Along with the businesses
that sit below their dam, the Cow Creek also own a
communications company, a graphic design and marketing company,
a lodge, a cattle ranch and hay operation, and Umpqua Indian
Foods, where the tribe manufactures and sells jerky and gift
items. They also run their own electric utility.
All that adds up to about 1,270 jobs. And it makes them the
second-largest employer in Douglas County.
The Coquille own an assisted living and Alzheimer’s
facility, the Mill Casino, a fiber-optic telecommunications
company, and Coquille Cranberries, which they say is the
world’s largest producer of organic cranberries. With the
more than 600 jobs they provide, they’re also the
second-largest employer in the county, paying an estimated $15
million in wages and benefits a year — wages that were
15% to 60% higher than those at comparable jobs elsewhere in
Coos County, according to the tribe’s analysis.
The Grand Ronde is already the largest employer in Polk County
with 1,500 employees. Several years ago it helped finance an
office building in Portland. Now it’s teamed up with the
Siletz on a $2.5 million business development project in
Keizer. Confederated Tribes of the Coos, Lower Umpqua &
Siuslaw Indians — which didn’t build a casino until
2004 — don’t have any major investments. But they
estimate that an upcoming expansion to the casino will create
250 more jobs in the town of Florence, population 8,000.
On the other side of the state, the Umatilla own the Wildhorse
Casino, a truck stop, an energy company, a market, a golf
course and a recreation area. In the last year, the tribe has
partnered with DaVita Inc. to build a kidney dialysis center
and with the international outsourcing company Accenture to
create Cayuse Technologies — a tech business with
software programming, digital document processing and a call
center. Both will open this year.
Of the Umatilla’s $145 million 2007 budget, the tribe
says that less than 20% of revenue comes from casino profits;
the rest comes from grants, contracts, interest earnings,
utility taxes and funding from the state and federal
governments.
Between their own government and businesses, they employ 1,135
people with a $35 million annual payroll. They, too, are the
second-largest employer in their county. And the 250-plus jobs
that Cayuse Technologies will create — tribal leaders say
the jobs will pay more on average than other area jobs —
may take them to the No. 1 spot soon.
“We’re not looking to have an empire here,”
says Stephanie Seamans, one of the Umatilla’s economic
planners. “But we want an economic base so that at some
point our unemployment rate is the same as everywhere else or
lower.”
That’s no small thing on a reservation where
unemployment stood at 37% just 15 years ago. And it’s no
small thing in a state where seven years ago 26% of American
Indian families earned less than $25,000 a year.
Seamans is beginning to get her wish: Since the 2000 census,
the number of American Indians in Oregon living below the
poverty rate dropped 23%, and the number of tribal members
going to college has increased 88%.
THE TRIBES’
ABILITY TO BUILD that economic base has led to some
conflict in the last few years. Publicly, there is broad
support for the their success. People and officials in the
cities that border tribal lands who criticize the tribes ask to
do so off the record for fear of upsetting tribal members. As
one person in Pendleton said, “They’re very
powerful.”
Buildings for the first two tenants in the
Umatilla’s
Coyote Business
Park, DaVita Inc. and Cayuse Technologies, are
scheduled to be finished this month. The tribe will
begin a push to bring light manufacturing to the
south end of the park early next year.
PHOTOS BY LEAH
NASH
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Critics say tribes have an unfair competitive advantage: They
don’t pay property taxes. They’re exempt from state
land-use laws. They don’t pay state taxes on the profits
from their casinos. How can non-tribal businesses be expected
to compete with that?
“The people who don’t understand what the
[Umatilla’s] 1855 treaty means are the people who
don’t get it,” Mills, the OECDD business
development officer, says. “You have to understand that
by law this is what they are able to do.”
Oregon’s tribes signed treaties with the federal
government at different times during the 1880s. Their
sovereignty — even though it wasn’t honored for
more than 100 years — gave them the rights that currently
draw complaints. Tribal governments, like state and local
governments and nonprofits, don’t pay taxes — just
like one state does not pay taxes to another state. However,
tribal businesses that aren’t on land that’s been
placed in federal trust do pay taxes, as do their
employees.
As multi-million dollar projects spring up in economically
depressed areas, it’s not surprising that some jealous
residents might begin imagining what individual tribes are
worth. But thinking they’re flush with cash is the wrong
assumption to make, says Robert Whelan, one of the economists
who did the ECONorthwest study on gaming. Oregon tribes had to
borrow a lot of money to build their casinos, often at high
rates because of their lack of financial assets, he says. Now
that money is coming in, he says, much of it goes to government
administration and providing health, education and housing
services to their members. That can be a heavy load for a tribe
like the Grand Ronde, with almost 5,000 members.
“We’re still at the early stages of what it will
ultimately look like for the tribes,” Whelan says.
“They’re still at the early stages of gaming,
developing businesses and providing social benefits to tribal
members. They’re starting to see changes in the
unemployment rate, in health care and education, but
they’re still far behind people who are not tribal
members.”
It’s that commitment to their culture and their members
that makes Oregon’s tribes a unique economic
entity. As Umatilla chairman Minthorn says, “I view it as
your culture and your economy are one and the same
thing.”
THE FUTURE OF GAMING
as it stands today is uncertain. Oregon tribes with the
smallest, most remotely situated casinos — the Klamath,
Burns Paiute and Warm Springs — have made controversial
overtures about starting off-reservation casinos closer to
metropolitan areas. Obviously that would cut into the profits
of other tribes.
And so the future lies in further diversification, which the
tribes readily acknowledge. Who’s doing the best at that?
When Tom Hampson, executive director of the Oregon Native
American Business Enterprise Network, talks about the tribes
who’ve done the best at diversifying, the names at the
top of his list aren’t surprising: the Coquille
(“very thoughtful in how they’re doing what
they’re doing”); the Cow Creek (“could have
stuck to tourism but they really stepped outside of
that”); the Umatilla (“great continuity of
leadership; they’re on a bit of a streak”).
The Umatilla plan to keep that streak going: A marketing push
to find more high tech and light manufacturing for their
business park will be ready in the next six months, says Bill
Tovey, director of the tribe’s department of economic and
community development. Then there are expansions to Wildhorse
Resort: more space for recreational vehicles, another dining
facility. “You can’t rule anything out for the
future,” Tovey says.
Other tribes are racing ahead as well. The Cow Creek have a
new sewer treatment facility in the works, plus a massive
expansion to the hotel portion of their resort, which will
break ground this year. The Grand Ronde and Siletz have their
development in Keizer. The Coos, Lower Umpqua and Siuslaw are
waiting for the passage of a bill — introduced by Sen.
Gordon Smith, R-Ore. — that would give them the
Cape Arago Lighthouse and nearby land.
Unsurprisingly, that future is rooted in the past. Minthorn
says his tribe’s economic drive is evidenced by trading
that stretched all the way to Mexico before the arrival of
European settlers. They hit a rough spot in the early 1970s
when a faction of the tribe successfully fought to divide up
among members a $2 million federal payment, instead of
investing in a hotel and golf course on I-84. It’s been a
slow process to relearn the importance of economic diversity,
Minthorn says. But by the time casinos came to Oregon, he says
tribal members understood that need.
“A lot of damage was done to our homeland, a lot of
promises were broken. There’s something called justice,
but you have to do something to achieve that. You have to work
to make this growth happen,” Minthorn says, then finishes
with a laugh: “It’s the American way, isn’t
it?”
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