The economic impact of nongambling-related tribal business in Michigan has a tremendous influence on the entire state economy, according to a recent study.
Nongaming business entities from nine federally recognized Michigan tribes presented Gov. Gretchen Whitmer’s office and the Michigan Economic Development Corporation with an economic impact report demonstrating 38 nongaming business entities, owned and managed by tribes in Michigan, generated a statewide economic impact of $288,756,091 in 2019.
As sovereign nations, tribes must seek financial means to support their governmental operations and programs that offer tribal citizens culturally appropriate health care, education, economic opportunity, and language and cultural preservation.
The gaming industry, through tribally owned casinos, is the most well-known manner in which tribes fund their government operations, but all 12 federally recognized tribes of Michigan have some degree of nongaming economic activity, according to the study. These tribes also have started to leverage casino revenues to launch economic diversity initiatives.
The study’s co-author, Eric Trevan, Ph.D., said the purpose of the study was to quantify and provide empirical data used to consider the benefits of nongaming tribal business entities in Michigan.
“Specifically, this study analyzes jobs, business development and retention, expansion and development investments,” Trevan said. “Ultimately, we’re considering how and in what way tribal business entities impact overall economic development throughout the state.”
The study found the economic multipliers resulting from the overall 2019 economic impact led to 1,847 jobs with an average wage of $45,664.
Additionally, nongaming tribal business generated $24,213,536 in state and federal taxes.
In West Michigan specifically, nongaming tribal businesses had a total economic impact of $51,451,141.80 in 2019, resulting in 636 jobs and $27,265,106.26 in combined labor income.
Deidra Mitchell, president and CEO of Waséyabek Development Company — a 100% tribally owned holding company that manages the Nottawaseppi Huron Band of the Potawatomi’s nongaming economic development activities, similar to another such well-known Michigan entity, Gun Lake Investments — coordinated the study.
She said the collaboration among tribes was “the first that we know of” that has been done to assess nongaming tribal economic impact in the U.S.
“This project highlights what tribes, operating as minority-owned business investors, can do when they work together,” Mitchell said. “While the overall impact is significant, it’s still small compared to the overall state GDP — and well below the population rate of Native Americans in Michigan. We see this as a baseline from which to further grow nongaming tribal business activity and impact.”
Mitchell added the “hard data” will help the tribes build a case for forming new business partnerships and attracting new investors, as well as giving the tribes solid footing from which to advocate for specific policy decisions with legislators.
“It will help guide the planning and coordination among tribes and policymakers, as we all look to the economic development of the state of Michigan, and then internally, it helps guide where, when and how tribes want to invest — what is working, what isn’t working and how do we responsibly deploy resources, whether financial, natural or personnel resources, in a way that creates sustainability,” she said.
“A tribe’s business approach often focuses on much more than revenue generation. Many times, it also encompasses environmental stewardship, career development opportunities and community sustainment, all aimed at fulfilling the tribe’s sociocultural mission on behalf of their citizens and their communities.”
Mitchell said Waséyabek’s portfolio of nongaming companies — which has deployed over $50 million into the Michigan economy and its tribe of about 1,500 members in the past four years — is mainly made up of commercial real estate; manufacturing research, development and engineering, including for the military; precision manufacturing; and business consulting for the state of Michigan and the federal government.
She said it will become increasingly important for all Michigan tribes to continue to diversify their nongaming revenue streams, especially in the era of COVID-19, which has had a significant negative impact on the hospitality and entertainment industries, including casinos.
The 38 businesses at the center of this nongaming economic impact study are all minority-owned and -operated and produce economic activity in 11 industry sectors, including utilities; construction; manufacturing; retail trade; finance and insurance; real estate; professional, scientific and technical services; management of companies and enterprises; administrative, support, waste management and remediation services; arts, entertainment and recreation; and accommodation and food service.
The nongaming business entities in the study are owned, controlled and managed by the following tribes in Michigan, whose rough geographic areas are listed:
- Hannahville Indian Community — west of Escanaba, Upper Peninsula
- Lac Vieux Desert Band of Lake Superior Chippewa Indians — Watersmeet, U.P.
- Little River Band of Ottawa Indians — Manistee and Mason counties
- Little Traverse Bay Bands of Odawa Indians — northwest Lower Peninsula (Traverse City area)
- Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (Gun Lake Tribe) — Dorr
- Nottawaseppi Huron Band of the Potawatomi Indians — Athens Township, Calhoun County, near Battle Creek
- Pokagon Band of Potawatomi Indians — Dowagiac/southwest Michigan/northwest Indiana
- Saginaw Chippewa Indian Tribe — Mount Pleasant/Standish
- Sault Ste. Marie Tribe of Chippewa Indians — Sault Ste. Marie, U.P.
In addition to Trevan, the other co-author of the study was Jon Panamaroff, chief compliance officer and senior vice president of business integration for Koniag Government Services and CEO of the Kodiak Brown Bear Center in Kodiak, Alaska.
The MEDC provided underwriting for the study, as well.
“The economic impact reflected in the report clearly demonstrates that nongaming tribal business entities have a significant, positive impact on jobs, wages, business development, expansion and the overall economic well-being of the state of Michigan and its local communities,” said Tom Durkee, business development manager at the MEDC.
Mitchell said the nine participating tribes hope to continue doing the study every couple of years moving forward, and she hopes the results will be even more positive in future years.
“Really good news came out of this study, and I think we could all use a little good news right now. But it also did show that there’s work still to be done. If you look at Michigan and then you look at the percentage of Native Americans by percent of total population, our GDP percentage is still well below where it should be,” Mitchell said.
“(It) reinforces that desire for us to partner with community leaders, business partners (and) policy makers — like all companies, not just tribal companies, who partner with those institutions so that we can comprehensively move the economy of Michigan forward.”