Wisconsin tribe’s efforts to diversify offer example for Indian Country
A trip to the Lac du Flambeau Reservation west of Minocqua produces the expected in some ways: a gleaming casino operated by the tribe, a stunning natural setting, and mixed evidence of prosperity and poverty.
A visitor may also encounter the unexpected in the form of steady economic diversification, a process being fostered by the Lac du Flambeau Business Development Corp. Its work may offer examples for others in Indian Country.
Managed by an independent board of directors but wholly owned by the tribal nation, the LDF Business Development Corp. was launched to create profitable enterprises and jobs for tribal members. It was done with the knowledge that gaming revenues may rise or fall over time, and that reliance on the Lake of the Torches Resort Casino alone was not a sustainable business model for the tribe and its 3,600 enrolled members.
“We want to diversify. Unfortunately, some tribes have yet to do that,” said Brent McFarland, the chief operating officer for the LDF Business Development Corp. and a member of the Wisconsin Economic Development Association’s board of directors.
That effort so far includes a construction company that undertakes commercial and residential projects, including some ambitious contracts on the reservation itself, such as a 20-bed Community Base Residential Treatment Facility. LDF Construction will soon undertake a retail renovation that will consolidate several existing businesses — a convenience store, gas station, and smoke shop — under one roof.
While the retail side of the LDF portfolio isn’t out of the ordinary, some other lines of business are atypical.
The LDF Business Development Corp. operates an Internet lending and call center with a number of clients, mostly companies in the installment loan business. Internet connectivity is vital to the center, which also handles credit-card processing from well beyond Wisconsin. The center’s installment loan business is focused on short-term loans for people outside Wisconsin who likely would not qualify for bank loans.
The center is managed by Melissa Doud, a 20-year U.S. Army veteran and former banker who views the ability to leverage technology as critical to the future of her tribe. For example, the LDF Business Development Corp. recently became the first general Aflac Insurance agency in Indian Country, a term that refers to 562 federally recognized tribes and bands.
About 2.9 million Americans with native ancestry were identified by the 2010 census, including about 55,000 in Wisconsin. About half of the Lac du Flambeau Chippewa band’s members live on its northern Wisconsin reservation; the rest are scattered, mostly in the upper Midwest. The Lac du Flambeau tribe is younger than most, which McFarland and Doud tout as an advantage for employers who want to work with the business development group.
On the horizon for the LDF Business Development Corp. is a 76-acre business and technology park that would be eligible for “hub zone” designation, which can lead to tax advantages for companies that set up shop there. Other existing businesses with tribal links include a fish hatchery, a wholesale fuel business, and an electric company that specializes in producing meters to measure current.
Meanwhile, LDF Construction is hoping to partner with nine other tribes or bands to handle construction projects well outside Lac du Flambeau.
“We have a multitude of businesses that generate revenue, and our goal is to become more sustainable while giving back to the tribe,” Doud said. “E-commerce is kind of the way to go for us, being as we’re in such a remote location.”
During a July 14 presentation to the Wisconsin Technology Council board of directors, McFarland and Doud stressed that LDF Business Development Corp. is not sitting back and waiting for opportunities to land on its doorstep — but is seeking them. Potential partnerships are vetted through a 21-step due diligence process.
Wisconsin’s native tribes exist in varying degrees of economic prosperity, with some relying on gaming revenues to the exclusion of other lines of business. The Lac du Flambeau Business Development Corp. didn’t invent diversification, even in Indian Country, but its goal is to make it a reality for the tribe.
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