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Lyons: The growing power of tribal economic diversification

Indian gaming may have made the majority of headlines over the past decade but there is an important economic trend with Indian tribes that should not be overlooked and that is the significant evolution of non-gaming businesses.

Tribal government gaming has never been an end to itself. It was always intended as a means of tribal economic development. Congress, in establishing the Indian Gaming Regulatory Act of 1988, intended that gaming "provide a means of promoting tribal economic development, self-sufficiency and strong tribal government."

Morongo's 32,000-acre reservation is one of the largest in California. We have used the land for fruit farming and cattle ranching. In later years, land was leased for sand and gravel mining operations or to various utilities, water districts and rail lines. But it was never enough to fully support our tribal community.

With the advent of tribal gaming, the Morongo tribe made an important strategic decision to utilize gaming revenue as a catalyst to establish a diversified tribal economy.

Morongo is fortunate to be located in one of the fastest growing counties in the United States. The tribe's developable land is located on both sides of a major transportation route with excellent freeway visibility. The reservation's location combines both freeway access and proximity to population centers.

With gaming revenue we moved to diversify. In 1997, Morongo opened one of the largest Shell gasoline stations in the country. In 1999, it was joined by an A&W drive-in restaurant nearly twice the size of the national prototype. The restaurant is one of the most successful A&W franchises in existence. Also in 1999, Morongo opened the first Coco's restaurant ever owned by an American Indian tribe. The tribe then acquired Hadley Fruit Orchards' three retail stores and mail order operations. This year a $26 million Arrowhead Mountain Spring Water bottling plant was opened on the Morongo Indian Reservation.

On another front, Morongo is exploring how to provide clean, reliable and low cost energy to its businesses, tenants and tribal members. The tribe's goal is to become energy self-sufficient, create yet another income stream and to maintain its traditional role as a steward of the environment.

With its diversification into non-gaming businesses, the tribe has become the largest private sector employer in the Pass Area and is a major contributor to the regional economy. Morongo now employs close to 2,000 people and has an annual payroll that exceeds $25 million. The tribe generates millions more in payroll taxes, unemployment benefits, employee benefits and health programs.

A recent economic impact analysis conducted by economist Dr. John Husing estimated that jobs directly or indirectly attributable to all of the economic operations of Morongo will rise from approximately 1,726 jobs in 2002 to approximately 5,800 in 2008. Total economic impact brought to the Inland Empire area during this period will be $2.8 billion including the creation of more than 4,000 new jobs and $1.4 billion in new goods and services purchased.

It is important to note that communities that are nearby tribal economic ventures gain the most number of newly created jobs. Why? Because tribal memberships, in many cases decimated over the past century, cannot now accommodate the employment requirements of tribal gaming and non-gaming ventures. In California, nearly two-thirds of the jobs created by tribal government are held by residents of nearby communities.

In addition to job creation, tribes also impact the economy with their purchase of goods and services. Morongo spends an estimated $20 million per year for goods and services purchased from about 1,200 outside vendors. (About 25 percent of these businesses are minority-owned and operated.)

This does not include the sale of goods and services generated by patrons visiting the area or services and merchandise purchased by tribal employees. The U.S. Department of Commerce research estimates that 42 jobs are created for every one million spent on goods and services.

An excellent role model for tribal economic diversification has been the Mississippi Band of Choctaw Indians which owns and operates a diversified portfolio of manufacturing, service, retail and tourism enterprises. Throughout Mississippi, the Southeast and even into Mexico, the Choctaw provide more than 8,000 permanent, full-time jobs for tribal members and others - more than 65 percent of its work force is non-Indian. With an annual payroll of more than $123.7 million, the Choctaw is one of the 10 largest employers in Mississippi. In addition, tribal revenues have helped the Choctaw to reinvest more than $210 million in economic development projects in Mississippi.

In the last decade, according to the U.S. Commerce Department's Census Bureau, the number of American Indian-owned businesses increased 93 percent from 52,980 in 1987 to 102,234 in 1992. Receipts for these businesses increased by 115 percent from $3.7 to $8.1 billion. The next census will reflect even more growth.

Last fall the National Summit for Emerging Tribal Economies, announced its goal of creating 100,000 jobs in Indian country by 2008 and establishing new sustainable, market-driven tribal economies by 2020 in a wide range of industry areas such as fossil and renewable energy, manufacturing, agriculture, utilities and telecommunications, hospitality and tourism, aerospace, health care, construction, media and finance.

According to the Virginia-based Falmouth Institute, "Native American businesses are emerging - from oyster farmers in the Northwest to Everglades tour operators in Florida. Lodging has seen a boom, particularly in the Southwest."

In California, tribal non-gaming economic development has included RV parks and mobile home development at Chemehuevi and Pechanga; retail stores and gas stations at Morongo and Pechanga; energy recovery and recycling programs at Cabazon; and banking ventures by the Agua Caliente and the Viejas tribe. Other tribes operate agri-businesses including alfalfa, citrus, avocado farming; fisheries and forestry operations; sand and gravel businesses; golf courses and real estate investments.

The National Indian Gaming Commission reports that 330 tribal casinos in the United States generated $14.4 billion in revenues last year. That revenue is being dedicated at a growing rate to investment and development of non-gaming businesses. In short, economic diversification is a smart bet for tribal governments and a long-term boon for surrounding communities as well.

Maurice B. Lyons, Tribal Chairman of the Morongo Band of Mission Indians, was born in Riverside county as one of nine children and grew up on the Morongo Indian Reservation. Lyons began his public service career in 1994 and has served as a tribal housing commissioner and as chairman of the Morongo Headstart Parent Policy Committee. He was first elected tribal chairman in 2001 and was recently re-elected tribal chair this past July. Chairman Lyons works with both state and federal legislators on Indian issues and matters affecting tribal government and economic development.