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Mille Lacs diversifies with ties that bind
Monday, July 20 2015
 
Written by Lee Egerstrom,
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mille lacs band diversifies with ties that bind.jpgWhen his peers in the Native American Finance Officers Association honored Joe Nayquonabe, Jr. this spring as their Executive of the Year, attention was given to the progress the Mille Lacs Band of Ojibwe is making in diversifying its investments and business enterprises.

Nayquonabe is Commissioner of Corporate Affairs for the Band and is chief executive officer of Mille Lacs Corporate Ventures (MLCV), the Band’s business investment arm that operates like a holding company with management responsibilities.

MLCV now has more than 35 different business entities. Together with the Band’s government and earlier investments in enterprises, the Mille Lacs Band is responsible for creating more than 3,500 jobs on and off the reservation.

The two anchors of the Band’s enterprises at the reservation, Grand Casino Mille Lacs and Grand Casino Hinckley, have 2,648 employees while non-gaming businesses located there have 225 employees. Other businesses are scattered around neighboring communities in East-Central Minnesota, in the Twin Cities metro area and now include a hotel in Oklahoma City.

The Mille Lacs Band entered the gaming business 24 years ago. The Bureau of Indian Affairs (BIA) then listed reservation unemployment at a staggering 80 percent. The Band now assesses its unemployment rate at 14 percent, a rate derived from knowing who is still in need of a job. That is a more simple, accurate but unofficial formula than methods used by the Bureau of Labor Statistics to measure unemployment for states, counties and cities.

“We are continually evaluating opportunities and looking for the next potential deal,” Nayquonabe said. No new deals are imminent, he added, “but I can share that we have our eye on a few properties throughout the country that would possibly make nice additions to our portfolio.”

Diversification was a stated goal at Mille Lacs when Band chief executive Melanie Benjamin named Nayquonabe to the commissioner’s post three years ago. With acquisitions and business expansions along the way, Mille Lacs leaders have insisted that gaming revenue is flattening out. Future economic growth must come from non-gaming enterprises.

The gaming industry has become “more competitive” throughout the country, Dawson Her Many Horses, a NAFOA board member from Las Vegas and a vice president for global commercial banking for Bank of America Merrill Lynch said. This makes the diversification efforts by Nayquonabe and other tribal financial officers in Indian country “critically important to the communities they serve,” he said.

For those reasons, selecting a NAFOA Executive of the Year is becoming more difficult, Her Many Horses said, because “a lot of great people” in leadership are working to ensure tribally owned enterprises are successful and have a positive impact on their communities.

What Mille Lacs is achieving, however, is like a textbook case study for community development.

Business school professors, philosophers and social responsibility advocates around the world constantly ponder ways to align social development goals with economic development. From this has emerged what is broadly called stakeholder theory, a theory that a business has shareholders (owners) and stakeholders (the customers, suppliers, employees and other people sharing community interests) in the well-being of the firm.

“I never lose sight of why we do what we do,” Nayquonabe said. “Our business enterprise is for the benefit of our Band members that include both the profits we make as a business as well as the jobs we create and the benefits they provide.”

This combining of shareholder and stakeholder interests guides the business expansion and diversification activities. MLCV is building on the hospitality industry talents and knowledge Mille Lacs members and employees have gained from their casino resorts. Other businesses are also extensions of these enterprises and provide services for gaming, marketing and “ancillary service investments within the Districts of the Mille Lacs Band Reservation,” he said.

As a result, MLCV is now the largest hotel operator in St. Paul, has acquired the Embassy Suites in Oklahoma City, operates a golf course, and in May it reopened the newly renovated Eddy’s Resort on Lake Mille Lacs.

U.S. Rep. Rick Nolan, from the surrounding Eighth Congressional District of Minnesota, was present on May 5 at Eddy’s grand opening. At that gathering, National Indian Gaming Association chairman Ernie Stevens Jr. presented an award to Benjamin and Nayquonabe for their work in extending the Band’s self-sufficiency.

Away from the hospitality industry, MLCV has acquired and expanded businesses that provide essential services for the Band, its businesses, and its members. These include close to home retail shops, such as gas stations and convenience stores; a movie theater, grocery store, a printing firm (Sweetgrass Media), and the nonprofit ML Wastewater Management water treatment plant that serves more than 10,000 people in the Lake Mille Lacs area.

MLCV doesn’t currently have financial programs that support individual entrepreneurs in starting businesses. But it does help independently operating Band members through business ties that continue to align community stakeholder interests.

A case in point is Chad German, a Band member who owns Red Circle Advertising Agency in Minneapolis. Now in business for 14 years, Red Circle specialized in promoting casinos exclusively for its first12 years. The agency’s 40 employees are expanding and diversifying to serve other accounts, German said, although Indian tribes and casinos still account for 95 percent of the business.

Like Nayquonabe, German worked as a summer intern at the Mille Lacs casinos when he was an undergraduate student at St. Cloud State University. He became advertising manager for Grand Casino Hinckley after graduate school and before going off to start Red Circle.

“We currently have more than 20 Indian casinos as clients, all over the country,” he said. During its history, Red Circle has served 85 different Indian casinos. The Mille Lacs Band was German’s first client; the casinos remain clients.

While working with tribes across the land, German said, he’s come to think of Indian communities as families. “What wealthy families do with their dollars is leverage them to make even more money.

“That money can work for you or just sit in a bank,” he added. “Joe has taken us (the Mille Lacs Band) to the next level and is leveraging our money like wealthy families.”

 

PHOTO: Eddy's Resort on Lake Mille Lacs had its grand opening on May 5 at which MLVC's Joe Nayquonabe, left, and Band chief executive Melanie Benjamin (second from left) were presented an award from National Indian Gaming Association chairman Ernie Stevens Jr. (center) for extending the Band's self-sufficiency. Joining them were Congressman Rick Nolan and Scott Vele, executive director of the Midwest Alliance of Sovereign Tribes (right). (Courtesy photo)


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