Mille Lacs diversifies with ties that bind

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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)