Nottawaseppi Huron Band of the Potawatomi finds the value in a diverse portfolio

The Nottawaseppi Huron Band of the Potawatomi is not willing to bet its entire economic future on the roll of the dice. 

The gaming industry has been very good to tribal nations operating casinos in Michigan. But, many of them, including the NHBP, have taken steps to diversify their revenue stream in recent years to ensure continued financial support to their tribal members.
 
And the grand plan is for NHBP to be a billion-dollar company in 20 years through a diversified portfolio.

Jamie Stuck, NHBP Tribal Chairperson, says almost every tribe in Michigan now has an economic development corporation as a way to diversify their portfolios and lessen their reliance on gaming as their sole revenue stream.

Deidra Mitchell, president and CEO of Waséyabek Development Company, the non-gaming arm of the NHBP.COVID19 has reinforced the merits of that decision, says Deidra Mitchell, president and CEO of Waséyabek Development Company, the non-gaming arm of the NHBP.

“Our tribe chose to diversify completely away from the (FireKeepers) casino,” Mitchell says. “Thankfully, we came through the pandemic not materially impacted.”

In addition to benefitting tribes financially, this diversification has also benefitted the state of Michigan, according to a study released earlier this month by Michigan’s nine federally-recognized tribes. This group presented Governor Whitmer’s office and the Michigan Economic Development Corporation with an economic impact study that found the 38 non-gaming business entities, owned and managed by tribes in Michigan, generated a statewide economic impact of nearly $289 million in 2019.

The Michigan Non-Gaming Tribal Economic Impact Study analyzed jobs, business development and retention, expansion, and development investments. Among its findings -- economic multipliers resulting from the overall 2019 economic impact led to 1,847 jobs with an average wage of $45,664.

Beyond that financial impact, Stuck says the study also will enable the tribes to influence policy-making within the state and increase their opportunities to work with businesses in the corporate sector.

“This study is showing the state that the tribes have a lot of economic impact within the state and their communities and not just in gaming,” he says.

The statewide study comes after the May release by the FireKeepers Local Revenue Sharing Board released of a study done by the W.E. Upjohn Institute for Employment Research--Socioeconomic Indicators and Economic Impact Analysis of FireKeepers Casino and Hotel. The Impact Analysis found that gaming adds almost $250 million in additional sales in Calhoun County, along with $21 million in personal income. Combined, gaming and non-gaming activities, sales in Calhoun County were $443 million higher due to activities of patrons and the facility, and personal income rose by $65 million.

FireKeepers represents slightly more than 4% of all county employment. Researchers with the Upjohn Institute estimate that in 2018, 2,426 jobs were added to the labor market due to people from outside of the county patronizing and spending money on services at the casino. These are public and private sector jobs, including direct employment by FireKeepers and also jobs created from the need for others, including grocers, accountants, and dry cleaners to supply goods and services to workers at FireKeepers.

Waséyabek’s focus is on three core sectors: commercial real estate, federal contracting, and commercial operations. Commercial real estate and federal contracting together account for 60 percent of the development company's business. Commercial operating businesses make up the remaining 40 percent. 

The development company, Waséyabek, is headquartered in the historic Kendall Building in downtown Grand Rapids, which it purchased in October 2019 for an undisclosed amount.

Stuck, who works out of the NHBP offices in Athens Township, says diversification is necessary for the continued financial health of the Tribe. He says Waséyabek’s activity follows a five-year strategic plan developed by the Tribe.

“We’ve just always thought that it’s very important. We can’t always count on what gaming’s going to be like in the future,” he says. “We just want to make sure we have our eggs in other baskets, which will diversify our ability to provide services and dividends back to our tribal members.”

Deidra Mitchell, center, and Jamie Stuck, NHBP Tribal Council Chaperson, to her right, at a board meeting of the Waséyabek Development Company at their headquarters.Further, he says economic development corporations like Waséyabek are important because they offer opportunities to mentor tribal members through the creation of programs that focus on tribal management and leadership, helping them to improve job prospects as they seek careers in various sectors.

Waséyabek Development Co. formed in 2011 and established its first board in 2014. Mitchell was hired in 2016 and played a role in the creation of Waséyabek’s strategic diversification plan. A key part of that plan is investing only in businesses that don’t rely on capacity drawn by FireKeepers, which ruled out hotels, C-stores, and other businesses tied to the casino.

The company acquired its first operating business in 2016, DWH, a company that provides a broad range of consulting services to businesses. DWH has since provided assistance to Waséyabek in areas including due diligence on acquisitions, filling positions on an interim basis, and succession planning.

Waséyabek's fifth property acquisition was the $17.5 million historic 18-story McKay Tower, made in partnership with Gun Lake Investments, the non-gaming economic investment arm of the Match-E-Be-Nash-She-Wish Band of Pottawatomi, the Gun Lake Tribe.The DWH acquisition was followed by the purchase of Baker Engineering LLC, headquartered in Nunica. Baker is a commercial manufacturer that also handles engineering and research and development and works for the U.S. Air Force and U.S. Department of Defense agencies.

Waséyabek has since added three more properties to their real estate portfolio, including a building formerly owned by the Goodwill in Grand Rapids. Goodwill now rents the space as a tenant. 

Waséyabek’s fourth purchase was the Kendall building followed by the $17.5 million acquisition of the historic 18-story McKay Tower, in partnership with Gun Lake Investments, the non-gaming economic investment entity of the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, also known as the Gun Lake Tribe.

Mitchell says Waséyabek is looking at some additional acquisitions in the commercial operating space that she isn’t ready to disclose yet.

“Our model is to acquire companies that have a strong history and leadership that want to stay three to five years through the transition,” she says. “If they have a risk appetite or resources, there are no wrong answers in terms of the types of companies we look at. In the early stages, we have chosen to focus on established companies.

“Types of businesses that we would avoid are those that are at a high risk for negatively impacting the environment or don’t agree with our tribal cultural beliefs.”

Waséyabek is now seeing its largest growth in the federal contracting area of its business. In September 2018, the company was awarded its first 8(a) contract, a $161 million U.S. Department of Energy award through a joint venture with Emeryville, California-based E2 Consulting Engineers Inc. to provide site operations and support services at three National Energy Technology Laboratory locations.

“We have our portfolio mix and we want to continue to pursue that,” Mitchell says. “As far as grand plans, we’d like to be a billion-dollar company in 20 years.”

In addition to the five-year plan that serves as the foundation for the Tribe’s economic development arm, Stuck says, “We also have an annual plan and have a really good vetting process as far as the acquisition pipeline. Basically, we’re vetting a possible acquisition to make sure it’s part of our strategic plan and doing our due diligence as far as learning about companies before we acquire them.”

Mitchell says Waséyabek will continue to seek out opportunities that will benefit NHBP tribal members and the state that is home to so many of them.

“If you take your economic development and business efforts and invest in something that’s dependent solely on a casino, you’re attracting a pretty weak link in your diversification strategy,” she says.
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