Qualla 2020: Diversifying the Qualla Economy

Qualla 2020:Diversifying the Qualla Economy

Fourth MeetingMay 21, 2014

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Agenda - Morning

9:00 Welcome and Introduction

9:15 Trust Land Law and Regulation - Presentation

10:00 Real Estate Action Plans

10:45 Knowledge Industries – Presentation

11:15 Knowledge Industry Action Plans

12:00 Lunch

Agenda - Afternoon

12:30 Review Potential Action Plans; Add New Ones- Enterprise Structure- Tourism- Small Business

2:30 Next Steps, Assignments

3:00 Adjourn

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Qualla 2020 Goals

The purpose of the Qualla 2020 Project is to diversify the Cherokee economy and reduce its risks so that it can better ensure the well-being of the Cherokee population into the future.

In order to do this, the Qualla 2020 Project will seek to mitigate the dependence of the economy on gaming revenues, and to develop and expand businesses in ways that uphold the core values of the Cherokee people.

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Qualla 2020 Process

Six Committee meetings Tuesday, February 25, 9:00 am – 3:00 pm Friday, March 21, 9:00 am – 3:00 pm

Yellow Hill Activity Center (Old Hardware Store) Wednesday, April 23, 9:00 am – 3:00 pm Wednesday, May 21, 9:00 am – 3:00 pm Friday, June 27, 9:00 am – 3:00 pm Tuesday, July 15, 9:00 am – 3:00 pm

Task teams will meet by phone between Committee meetings to develop detailed action plans for Committee review

Committee will choose action plans to recommend to EBCI Administration, EBCI Tribal Council and Cherokee Preservation Foundation

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Action Plan Definition

Action plan criteria: Achievable with the resources controlled by institutions and

individuals on the Qualla Boundary Create visible differences within a year or two Support traditional Cherokee values and culture

Action plan elements:

Goal Participants Activities Organizational leadership Resources required Funding sources Timeline

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Agenda - Morning






12:00 Lunch

Trust Land Law and Regulation

In order to streamline and simplify the leasing process, it will be critical to have oversight of leasing moved from the BIA to the Tribe. There are three key legal and regulatory areas that are important to understand:

EBCI Statutory Law – individual possessory holdings HEARTH Act – leasing regulations for trust land Contracting and Compacting – Tribal assumption of part or all

of the Realty function

We also will look briefly at state property tax on the Boundary

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EBCI Statutory Law: Individual Possessory Holdings

The EBCI Attorney General holds that because of the specific way in which EBCI land is held in trust, individual possessory holdings are governed by EBCI statute, not by federal law

Section 47 - Real Property of the Cherokee Code contains the statutes governing real property; Section 47-4 stipulates the rights granted to a member when a possessory holding is issued

The fact that the individual possessory holdings are governed by EBCI statute implies that EBCI Tribal Council has the authority to change the statutes governing individual possessory holdings without having to consult with the BIA

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Source: Hannah Smith, Attorney General’s Office

EBCI Statutory Law: Individual Possessory Holdings

The way that the law is currently written involves the BIA in leasing. Section 47-4(f):

“The possessory holder may grant leases or permits on this possessory holding to a member, or nonmember of the Band for a definite period of time and for a prescribed consideration, in accordance with the then applicable rules and regulations of the Bureau of Indian Affairs and the Tribe, and subject to the approval of the Business Committee and the Secretary of the Interior or his authorized representative.”

This law clearly requires the BIA to be involved in leasing – but this law can be changed without the BIA’s involvement or consent.

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HEARTH Act – Overview

HEARTH Act (Helping Expedite and Advance Responsible Tribal Home Ownership Act of 2012) establishes new framework for leasing tribal trust lands

The HEARTH Act allows all tribes to opt-out of the secretarial approval requirement when leasing their own lands for the first time in the history of federal Indian law. In effect, the HEARTH Act restores tribes’ inherent authority over the use and development of their own lands.

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Details adapted from Bryan Newland, Fletcher PLLC

HEARTH Act

To opt-in, tribes must adopt their own leasing regulations

Tribal regulations must be approved by the Secretary of the Interior

Secretary has 120 days to review tribal regulations

Law is limited to tribally-owned trust lands Doesn’t apply to individually-owned lands

Law is limited to surface leasing

No oil & gas leasing

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HEARTH Act Requirements

Tribal regulations must: Be “consistent” with BIA’s leasing regulations Establish an environmental review process

Environmental review process requirements

Identification of significant environmental effects Public notice and comment Tribe must respond to substantive public comments NOTE: NEPA doesn’t apply > this is a tribal process

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Tribes Whose Regulations Have Been Accepted Under HEARTH Act

1. Graton Rancheria (CA)

2. Pueblo of Sandia (NM)

3. Pokagon Band of Potawatomi (MI)

4. Ak-Chin Indian Community (AZ)

5. Santa Rosa Band of Cahuilla Indians (CA)

6. Citizen Potawatomi Band (OK)

7. Ewiiaapaayp Band of Kumeyaay Indians (CA) 8. Kaw Nation (OK) 9. Dry Creek Rancheria (CA)

10. Jamestown S’Klallam (WA)

11. Mohegan Tribe (CT)

12. Wichita and Affiliated Tribes (OK)

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Taking Over the Realty Function:Contracting and Compacting

Tribes have the authority to take over a part (contracting) or all (compacting) of the administrative functions performed by the BIA, the HIS, and other government entities.

EBCI has already compacted the administration of the Cherokee Indian Hospital from the HIS

More than 100 tribes have compacted one or more functions

Legal framework: Self-Determination contracts are authorized under the

1975 Indian Self Determination and Education Assistance Act. Self-Governance compacts are made possible by 1994

amendments to the 1975 Indian Self Determination and Education Assistance Act.

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From Self-Governance: The Red Book by The Office of Self Governance

Self-Determination Contracts (Realty)

Tribe negotiates with local BIA Agency/Area

Tribe agrees to provide specific services that otherwise would be provided as part of the activities of the BIA

The Tribe is paid a specific amount (fixed price) for each contracted service

The Tribe submits quarterly reports on expenditures in each contract

BIA rules, regulations and manual apply

The BIA has ultimate responsibility for ensuring services are delivered appropriately.

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Self-Governance Compacts (Realty)

Tribe negotiates with Office of Self-Governance (DC)

Tribe agrees to take over an entire function that otherwise would be provided as part of the activities of the BIA. This may include Realty Services and Title Plant

Tribe may redesign programs and activities within that function Tribe must have appropriate data and management system, such as BIA Trust Asset

and Accounting Management System

Tribe has an annual funding agreement from the BIA for the function (not program by program or service by service)

The Tribe submits quarterly reports on total expenditures; has authority to shift expenditures within function (up to a limit)

BIA rules and regulations apply, but Tribe may replace BIA guidelines with its own guidelines. BIA manual doesn’t apply.

The Tribe has the ultimate responsibility for ensuring that services are delivered appropriately.

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Page 18Lummi Tribe: Example of Realty Compact

Advice on Compacting

Confederated Salish and Kootenai Tribes (CSKT) began compacting BIA Real Estate Services in 1990’s and added BIA Title Plant Services in 1994

BIA compact revenue is $5.6 million annually. CSKT supplements this with its own funds to improve the quality of service.

CSKT advice for other Tribes considering compacting: Be extremely well-prepared and flexible before beginning self-

governance negotiations. Backlog issues Reporting requirements Is there a passion for providing these services?

Tribe and BIA should both be flexible and recognize the importance of a continued partnership after the initial self-governance compact

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State Taxation of Property on the Boundary

North Carolina property tax is levied by counties both on real estate and on business property (computers, office equipment, etc.).

NC regards a long-term lease as being real property, and therefore subject to property tax

NC holds that when the Tribe or a Tribal member enters into a long-term lease with a non-member, the non-member will owe property tax to the local county on the value of the leasehold interest and business property whether or not the property is on the Boundary.

Example: Food Lion Shopping Center – the lessee is paying property tax to Jackson County

New BIA regulations (25 CFR Part 162) suggest that NC’s view is not correct, and no property tax can be levied on the Boundary, regardless of who holds the lease

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Agenda - Morning






12:00 Lunch

Real Estate Action Plans

Two action plans under development for review today Create implementation plan for compacting BIA Realty

function Develop draft statutes to required to change individual

possessory holding legal framework

EBCI Attorney General’s Office, Commerce Department and Finance Department are actively reviewing HEARTH Act, so no need for an action plan on this subject

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Create Implementation Plan for Compacting BIA Realty Function

Goal: create an implementation plan for compacting the BIA Realty function.

What questions should the implementation plan answer? Options: What are the potential different options for compacting

the Realty function? Finances:

How much it would cost the Tribe to take over the function? How much money would the BIA pay the Tribe to provide the service?

Operations: What are the requirements in terms of people, software, and

machines? What will be the impact on jobs?

Examples: What other tribes have done this and what has their experience been?

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Activities: Assessment of current Tribal Land Records documents

management by BIA Analysis of Realty Services workflow and procedures Recommendations and modifications to Land Records

Management database schema Estimate of the initial startup implementation cost Estimate of the long-term operating cost

Organizational leadership – Commerce Department Organizational participants in addition to Commerce

Tribal Housing Program - Paulette Cox EBCI Courts – Hannah Smith and her staff Chief’s Office - Paxton Myers Finance – Corey Blankenship or his designee GIS Office – David Wyatt

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Resources: Hiring of independent contractor to facilitate development of

implementation plan and development of new procedures $15,000

Travel cost for GIS office staff site visits to two other Tribes and National Tribal GIS conference

$14,000 GIS database schema modification cost and custom workflow

programming $20,000

Supplies $1,000

Total cost of implementation plan development: $50,000 Funding sources - TBD Timeline – 18 months

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Develop Draft Statutes for Individual Possessory Holding Legal Framework

Goal: Fund the legal work required to conduct research on how/whether other tribes have changed

statutes regarding individual possessory interests, and to develop draft statutes and regulations that would simplifying the process for leases and sales of individual possessory interests

Activities: Engage outside expert counsel Survey relevant tribal experience Review existing EBCI statutes, regulations and case law Develop initial draft of new proposed statutes and review with Executive and Tribal Council

leadership Public comment and community engagement

Prepare final draft of new proposed statutes for submission to Council Develop regulations and procedures required to fully implement new statutes

Resources required: approximately $40,000 for research, legal drafting and community engagement

Funding sources – TBD

Timeline – 18 months

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Agenda - Morning






12:00 Lunch

Knowledge Industries

Knowledge Industry definition Businesses whose operations and success depends mainly on

knowledge, innovation and technology. Examples include software, high-tech manufacturing, communications, R&D, and finance.

Knowledge workers are workers whose main asset is knowledge. They are paid to “think for a living”. Typical examples may include software engineers, architects, engineers, scientists and lawyers.

We will focus on a segment of knowledge industry: Knowledge industry clusters that are growing in NC, and for

whom the “5-9’s” reliability and bandwidth provided by BalsamWest are “mission-critical”

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Knowledge Industry Clusters Growing in NC and That Require “5-9s” Reliability

Existing clusters Computer programming, systems design, & related services Health sciences (incl. pharmaceuticals) and informatics Surgical and medical instruments

Emerging clusters Magnetic & optical media manufacturing & reproduction Data processing, Internet hosting, & related services Software publishing Banking and finance Internet publishing & broadcasting, ISPs & search portals, &

other information services Business, scientific, & technical consulting services Rapid prototyping and specialized design services

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Business Attraction: Mountain West Alliance

Qualla Boundary and seven westernmost NC counties are each too small individually to have the resources and the sites necessary to compete effectively to attract knowledge businesses

Have formed Mountain West Alliance to work together to be able to identify and pursue potential knowledge industries

Regional approach has been successful for other rural NC communities in attracting knowledge industries

Example: “Data center corridor” in rural NC, including Alexander, Burke, Caldwell, Catawba and Iredell counties.

Data centers from Google, Apple, financial services, etc.

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Key Assets for Attracting Knowledge Industries

Infrastructure: “5 9’s” high bandwidth fiber, inexpensive redundant power, plentiful water

Workforce: skilled labor for knowledge industry applications

Build on WCU, community college training Public sector: supportive, business friendly Quality of life: natural resources, housing, schools

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Profile of Entrepreneur/Firm Owner

Interest in outdoor recreation Mountain roots Rural lifestyle preference Family at Western Carolina University, or alumni Retirement transitioning

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Attracting Knowledge Industries

Conduct market research to determine best potential areas/networks in which to recruit

Develop “market offering”: sites, information, incentives to share with potentially interested companies.

Locations available Information on workforce, quality of life, industry clusters Incentive packages and assistance

Develop and launch marketing campaign

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Knowledge Industry Action Plans

To be reviewed today Marketing plan for attraction of Knowledge Industries Feasibility study for fiber-enabled office building and co-

working space

On hold Tribally-owned data center

This is already being explored by EBCI Commerce. Call center to service Harrah’s and other Caesar’s properties

This is being reviewed by a team at Harrah’s

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Marketing Plan for Attraction of Knowledge Industries

Goal: identify and attract small-midsize knowledge businesses to Boundary and 7 counties of Western NC

Activities: Inventory and quantify the key assets of Mountain West

Alliance region make it uniquely attractive to small, growing, entrepreneurial knowledge industry businesses

Conduct market research to develop clear profiles of target market segments/customers who would find the assets of Mountain West Alliance locations attractive.

Develop “market offering”: sites, information, incentives to share with potentially interested companies.

Develop and launch marketing campaign

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Marketing Plan for Attraction of Knowledge Industries

Organizational home: Southwest Commission Potential Partners

EBCI Commerce, Economic Development Depts of 7 Western Counties, Duke Energy, Drake Software

Resources: TBD Potential funding in cash and in kind

Drake Software? Special assessment from 7 counties? EBCI? Cherokee Preservation Foundation?

Timeline: 18 months

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Feasibility Study for Fiber-Enabled Office Building and Co-Working Space

Goal: determine whether sufficient demand exists at specific rental price points to support cost of fiber-enabled office building/co-work space (similar to Mojo in Asheville)

Activities: Develop profile of potential users Conduct individual interviews and online survey of tech and home-

based entrepreneurs businesses within a 30-mile radius/located in Jackson or Swain County

Develop estimate of potential demand for office and co-working space and a suite of services at particular price points

Organizational leadership: Sequoyah Fund and Southwestern Commission

Potential Partners: Chamber of Commerce, EBCI Commerce Department, WCU Small Business Technical Development Center, Haywood Committee College Entrepreneurial Program and the TERO Office.

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Agenda - Afternoon

12:30 Review Potential Action Plans; Add New Ones- Enterprise Structure- Small Business- Tourism

2:30 Next Steps, Assignments

3:00 Adjourn

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Small Business Action Plans

Small Business and Entrepreneurship Action Plans for discussion today:

Expand sales of Cherokee art Strengthen Chamber of Commerce Create an economic coalition to support small business

development and growth Build a more vibrant entrepreneurial culture on the Boundary

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Success Factors for Small Business

Market Demand

Trained Workforce

Capital

Public Sector

SupportTransport & Comm.

Suppliers & Resources

Entrep. Culture

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Action Plan: Expand Sales of Cherokee Art

Goal – Expand sales by Cherokee artists, both traditional and contemporary art.Activities - Create online sales using available social media tools Develop a Cherokee authenticity label Develop a distinctive Cherokee brand Create a Cherokee artist council Include both traditional and contemporary art Broker Cherokee art off-Boundary Provide entrepreneurial training Qualify Cherokee artist as trainers Support creation of artist portfolios Provide micro-loans to artists Support artists’ sales booths at various events

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Action Plan: Expand Sales of Cherokee Art

Organizational leadership – Sequoyah FundParticipants Sequoyah Fund – Russ Seagle, Hope Huskey Qualla Arts & Crafts – Vicki CruzResources required – Estimates to be developed by Sequoyah FundFunding sources – Primarily Sequoyah FundTimeline – Steps being taken now

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Action Plan: Strengthen the Chamber of Commerce

Goal – Strengthen Cherokee Chamber of Commerce financially and operationallyActivities Develop a business case for supporting the Chamber from levy

and privilege taxes on Cherokee businesses Work with EBCI Finance to develop potential formulas for

obtaining funding from levy and privilege taxes Seek sources of ongoing funding from levy and privilege taxes

through EBCI Administration and Tribal Council In parallel with the above, create a plan for expanding business

assets in Cherokee Develop and provide a complete array of small business services

to Cherokee Collaborate with surrounding Chambers and economic

development agencies to seek small business growth

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Action Plan: Strengthen the Chamber of Commerce

Organizational leadership – Cherokee Chamber of CommerceParticipants Cherokee Chamber of Commerce – Amy Parker EBCI Finance – TBD Surrounding Chambers and E.D. agenciesResources required - TBDFunding sources - TBDTimeline - TBD

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Action Plan: Create Economic Development Coalition

Goal – Create an economic coalition to support small business attraction, development and growthActivities Develop a coordinated strategy to create new jobs in all

sectors of existing businesses through expansion and growth

Create and implement a coordinated plan to attract businesses to locate in Cherokee and the surrounding three counties

Develop a strategy that encourages entrepreneurial efforts to start businesses in targeted fields

Coordinate and integrate the efforts of economic development on the Boundary with neighboring interests, including economic development agencies and Chambers in Swain, Jackson and Haywood Counties

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Action Plan: Create Economic Development Coalition

Organizational leadership Cherokee Chamber of Commerce – Amy Parker EBCI Commerce – Jason Lambert Sequoyah Fund – Russ Seagle Destination Marketing – Skooter McCoy Swain, Jackson and Haywood Counties Smoky Mountain Host WCU – Steve Morse CPF – Mary Jane FergusonResources required – TBDFunding sources – TBDTimeline - TBD

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Action Plan: Build a More Vibrant Entrepreneurial Culture

Goal – Build a more vibrant entrepreneurial culture on the Boundary.Entrepreneurial Small Business needs: Markets Location to lease or build Access to Capital Employees Small Business Training/Development Resources Business Services – Insurance, Accounting, Marketing, etc. Clear, Concise Information about the Selected Environment Supply and Distribution Chain Information Connectivity Inspiration

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Activities Establish a baseline description of a desirable/optimal

small business environment Complete research necessary to map the small business

environment in Cherokee Identify gaps/constraints between Cherokee environment

and baseline Prioritize the challenges and attack the problem Create incentives to come to Cherokee Develop the resources and avenues to connect with

potential small businesses locally, regionally and beyond Offer Indianpreneurship training Start, gain momentum, and sustain the effort

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Organizational leadership Sequoyah Fund – Russ Seagle EBCI Commerce – Jason Lambert TCGE – Ray Rose EBCI Destination Marketing – Skooter McCoy Cherokee Chamber of Commerce – Amy ParkerResources required - TBDFunding sources -TBDTimeline - TBD

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Tourism Action Plan

Goal – Develop options for increasing tourism, utilizing cultural and natural assetsOrganizational Leadership - Skooter McCoy, Destination MarketingActivities -

New programs for Unto These Hills being discussed with CHA Board Relocate Oconaluftee village near the Museum Add fly fishing museum along with trout exhibit/aquarium Create a downtown Base Camp of the Smokies with appropriate retail Relocate Fairgrounds to old high school site Add convention center to high school site Develop wildlife attraction at the Oconaluftee Village site Improve attractiveness of Saunooke Village Add visitor amenities to the gaming destination Create all new visitor way-finding signage Develop a fishing pond for children Prepare a community gathering place

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Tourism Action Plan

Next Steps Bring the concept to the CHA and Museum Boards, and get their

acceptance and approval…discussions under way Communicate the district concept to EBCI Administration, Planning Board,

Tribal Council, business owners, and community leaders Convene a coalition of organizations within each district to provide input

during the transition Develop a master plan with renderings with cost estimates for the creation

of the districts Conduct feasibility studies for the major element of the program Start archeological and Phase I environmental studiesOrganizational leadership – EBCI Destination MarketingResources required - TBDFunding sources - TBDTimeline - TBD

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Next Steps

Fourth meeting of task teams by phone Continue work on options

Research Interviews Financial analysis Exploration of funding sources Development of recommendations

BWB Solutions and Medicine Root will staff and facilitate tasks teams and conduct additional research as necessary

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Contact Information

Ben [email protected]

(303) 818-4926

John [email protected]

(203) 314-8600

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mailto:[email protected]

mailto:[email protected]

Appendix

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State Taxation of Property on the Boundary

North Carolina property tax is levied both on real estate and on business property (computers, office equipment, etc.).

The tax is levied by and paid to the counties. Each county sets its own property tax rate.

Jackson $.28 per $100 of valuation; Swain $.36 per $100 NC regards a long-term lease as being real property, and therefore subject to

property tax NC position on taxation

Property owned, developed and held by the Tribe is not subject to property tax (example: Harrah’s)

Property owned, developed and held by Tribal members is not subject to property tax.

If the Tribe or a Tribal member enters into a long-term lease with a non-member, the non-member will owe property tax to the local county on the value of the leasehold interest, whether or not the property is on the Boundary.

Example: Food Lion Shopping Center – the leasee is paying property tax to Jackson County

Business property held by a non-member is subject to property tax, whether or not the business property is on the Boundary.

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New BIA Leasing Regulations: A Contrary Position

New BIA leasing regulations (25 CFR Part 162) provide a position contrary to NC’s position

162.017. “The purposes of residential, business, and wind/ solar resource leasing on Indian land are to promote Indian housing and to allow Indian landowners to use their land profitably for economic development, ultimately contributing to tribal well-being and self-government.”

162.017(a). “Subject only to applicable Federal law, permanent improvements on trust or restricted land are not taxable by States or localities, regardless of who owns the improvements.”

162.017(b). “Subject only to applicable Federal law, activities conducted under a lease of trust or restricted land that occur on the leased premises are not taxable by States or localities, regardless of who conducts the activities.”

These new regulations open the door to changing the current property tax situation on the Boundary.

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Qualla 2020: Diversifying the Qualla Economy

Documents

ebci land

detailed action plans

real estate action plans

ebci statute

ebci administration

bia page

review potential action

ebci tribal council