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The Best Bet: Building Tribal Self-Reliance Through Economic Diversification

Over the past decade most tribes have made the news because they have been involved in gaming. The struggle to protect gaming rights and gaming related stories have dominated the headlines. But there is an important economic trend with California 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. This year, the Morongo Band of Mission Indians is taking another important step toward fulfilling that promise of economic development with a project that will deliver new jobs and economic stability to the reservation and the surrounding communities of the Inland Empire.

The Morongo tribe's 32,000-acre reservation is one of the largest in California. Throughout our history, we have utilized the land for fruit farming, crop rotation and cattle ranching. In later years, land was leased for sand and gravel mining operations. Another avenue used to generate income was leasing land access to various utilities like Edison, ARCO, GTE, natural gas companies, water districts and the rail lines. But it was never enough to fully support the tribal community and there was little capital available to the tribe for greater leverage of our resources.

With the advent of tribal gaming, the Morongo tribe made an important strategic decision -- to utilize gaming revenue as a catalyst to establish a new diversified tribal economy -- one reliant on many avenues of income not just a single source.

In 1997, Morongo opened one of the largest Shell gasoline stations in the country. In January 1999, it was joined by an A&W drive-in restaurant nearly twice the size of the Chicago-based prototype. The restaurant has gone on to become one of the most successful A&W franchises in existence. In July 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 including the company's mail order and franchise rights.

Now, construction is underway on a $26 million Arrowhead Mountain Spring Water bottling plant on the Morongo Indian Reservation. This venture allows the Morongo tribe to diversify its economy further through the sale of spring water to Arrowhead Mountain Spring Water, a subsidiary of The Perrier Group of America, the nation's largest water bottler.

Development of the plant will create an estimated 260 local jobs directly and add another 1,800 indirect jobs to the regional economy.

When fully built out, it will be the largest water bottling plant in the United States. And it is being constructed with such scrupulous attention to the needs of the environment that we are hopeful it will become the first manufacturing plant in the world to be certified by the U.S. Green Building Council for its Leadership in Energy and Environmental Design program.

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. The tribe now employs more than 1,500 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. More than two-thirds of the Morongo workforce is composed of residents from the Riverside, San Bernardino, Pass Area and desert cities.

The tribe 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 million spent on goods and services.

In this region, and 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.

Economic diversification is in the cards for Morongo and for many California Indian tribes that will increasingly seek economically viable alternatives to help raise living standards for one of the most impoverished ethnic groups in the United States.

We are fortunate to be located in one of the fastest growing counties in the United States. If the Inland Empire were a state, it would rank as the 30th largest in terms of population (3 million) and the 32nd largest in terms of total income -- $52 billion. It grows daily as the choice location for business and industry. 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. We believe that the vectors for shipping, transportation, entertainment and commerce will converge at Morongo to establish a new gateway for the Inland Empire.

Our strategy for non-gaming business development and our commitment to working with local and state government will help ensure future economic stability and financial resources for future generations of our tribal community and the community at large. In short, economic diversification is a smart bet for tribal governments and a long-term boon for our neighbors as well.