From Red Cliff to Pine Ridge, reservations tie hopes to tourism, small business and manufacturing

David Fettig | Editor

Published July 1, 1992  | July 1992 issue

Tribal officials seek entrepreneurs from within

Andrew Gokee, community planner for the Red Cliff Indian Reservation in northern Wisconsin, remembers growing up on the reservation in the early '60s. A handful of houses had indoor plumbing. The reservation's population was at a historical low. "Heritage" was a dirty word.

Today, just a few homes are without plumbing, and those are structures that were built in advance of infrastructure. The reservation's population has tripled to about 1,500, and many members of the northwestern Wisconsin Chippewa tribe, proud of their ancestral heritage, have moved home to the reservation.

In the case of Gokee's brother, coming home meant leaving a $20 per hour job "in the city" for a $5 job on the reservation. He moved back to bring his children closer to their culture and to avoid the crime that is prevalent in some inner-city neighborhoods. "People are getting back to their roots," Gokee says.

With fishing in decline, Red Cliff hopes for private business, tourism

The trend for American Indians to move to their respective reservations is occurring throughout the United States, and Gokee hopes this movement helps inspire growth in economic activity. Such activity would be welcome on Red Cliff, which traditionally has depended on a fishing industry that may be in decline. Unemployment hovers around 50 percent on Red Cliff, 65 percent of the population live below the poverty level, the median household income is about $8,000 and the estimated per capita income is $1,450.

Gokee notes that those statistics, which are about two years old, have likely improved since the recent addition of a gambling and bingo hall on the reservation. The casino, which opened in February, employs about 140 people. "There aren't a lot of high-paying jobs, but they are jobs," Gokee says.

However, the gambling facility is small when compared to some casinos in Minnesota and Wisconsin, and is not expected to generate large profits for the relatively isolated reservation. "It [gambling] will not represent our future in terms of economic independence," Gokee says.

The future will also likely mean a reduced impact from the commercial fishing industry, according to Gokee. Commercial fishing represents the second-largest source of unsubsidized employment on the reservation (after the casino), with over 100 tribal members dependent on fishing for their subsistence. Of those, about 30 have made substantial investments in large boats, Gokee says.

For years, tribal members have harvested fish that have been shipped to Illinois, Michigan, Minnesota and Wisconsin for wholesale and retail sales, mostly to restaurants. The past five years the tribe has successfully operated its own processing company, the Buffalo Bay Fish Co., where tribal members and others can unload their catch.

But a 10-year management plan put forth by the state last year that reduces quotas will likely squeeze out some fishermen, Gokee says. "Basically, it's a smaller pie with the same number of pieces," Gokee says. "The fishermen never thought it would get to the point where they couldn't survive. For some, that's all they know."

With fishing likely on the decline, and with a moderate—indeed, uncertain—future for its gambling operation, Gokee hopes the future will bring the start of entrepreneurship on the reservation. On Red Cliff, as on many reservations, most businesses are tribally owned and managed. Recently, however, Gokee says that tribal leaders have come to realize that government and business management don't always mix. A federal study expected later this year will report on the advisability of creating a retail center on the reservation. Gokee wants such a center to be filled with individually owned stores. "If only one person were to open a store it would help the reservation," Gokee says.

Currently, nearly all of the reservation's disposable income is spent in nearby Bayfield, for groceries, clothing, laundry and other services. Very few of Red Cliff's dollars are "turned over" on the reservation, Gokee says--a lament shared by many reservations. Studies done by the First Nations Development Institute have shown that many communities on the borders of Indian reservations owe their economic success—in significant part—to the spending of reservation members.

As far as developing any sort of industrial or manufacturing plant on the reservation, Gokee says Red Cliff is hampered by its small size (about 15,000 acres), its clay-based soil that is unsuitable for septic systems, and its lack of resources to extend infrastructure to new areas.

Tourism is expected to provide a lift in about three years when a replica 19th-century Ojibwe village is expected to be constructed. Ideally, the project will include a retreat center and interpretive center, and be built with funds that will include expansion of reservation education programs, Gokee says. Currently, tourism gives a seasonal boost to the reservation from the operation of a tribal marina and campground, as well as the casino.

A revitalized grocery, a plastics plant and a growing casino enhance Sisseton life

In Agency Village of the Sisseton Reservation in northeast South Dakota, the local grocery store and gas station was reopened in May after three years. Co-owned and managed by Dale Hanson, from nearby Sisseton, the store offers a full line of groceries at low prices—the only such grocer on the reservation.

In addition to the wages paid to the all-Indian workforce and the tax money accrued for the reservation, Hanson hopes the store also brings a feeling of pride and self-sufficiency to the tribe.

The reopening of the grocery, the construction of a plastic bag manufacturing plant and the expansion of the tribe's gambling casino are all helping to instill hope within the tribe, according to Floyd DeCoteau of the tribal planning office.

Employee levels are uncertain at the plastics plant, which will fill government contracts when it begins production, perhaps later this year; but at the tribe's Dakota Sioux Casino, employment is rising fast. Last year, there were 45 employees at the casino, located near Watertown, and this year there are 226, over 70 percent of whom are Indian. If a proposed motel and convention center are built in the next few years, employee levels could triple, DeCoteau says.

This summer, a new water tank and lagoon will be constructed at the casino site, and a new parking lot is planned. Together, the three construction projects will bring about 35 temporary jobs. Also, the casino is undergoing a $2.3 million renovation to its interior and exterior. The improvements are meant to make the casino more comfortable and attractive, DeCoteau says, thereby making it more competitive with some of its Minnesota neighbors. Dakota Casino is only about two hours west of Jackpot Junction casino in southwestern Minnesota.

DeCoteau says the city of Watertown has been very supportive of the tribe's casino and has been helpful in supplying infrastructure. This goodwill relationship has extended to all tribal members, he says. Most of the reservation population will travel to Watertown to shop, even if they must travel as much as 60 miles or more.

The tribe's relationship with Watertown, along with nearby Peever, is important to the reservation's future, DeCoteau says. "If we work together, things will happen for both," he says of relationships between the Sisseton-Wahpeton Sioux Tribe and non-Indian communities.

For Devils Lake Sioux, defense cutbacks bring new challenges

July came early for about 120 employees of the Sioux Manufacturing Corp. of Fort Totten, N.D. On a Tuesday morning in early May, those employees were told that they would be laid off until the end of the summer.

But layoffs are common for Sioux Manufacturing; normally, such layoffs occur in mid-summer and last for a shorter time. This isn't a normal year for the company, however, which is owned and managed by the Devils Lake Sioux Tribe and which has gained most of its business from contracts with the Defense Department. Defense cutbacks have trimmed the demand for the company's primary product--camouflaging. The firm's final camouflage contract with the Defense Department is likely to begin late this year and end by November 1993, according to Carl McKay, chief executive of Sioux Manufacturing. The company, which employs about 300 at normal capacity, had sales of about $40 million last year.

"Camouflage is a dead horse," McKay says. But that won't spell the end of Sioux Manufacturing, he adds. In May the firm was on the verge of signing a large contract with a private airplane manufacturer for the construction of certain airplane parts. The specifics of the deal, however—the name of the manufacturer, the size of the contract and the parts involved—were kept secret by McKay because the deal was still under negotiation.

The next step for Sioux Manufacturing is to be recognized as a quality supplier on the commercial side, McKay says, specifically for the airplane and aerospace industry. And he's confident of his firm's future. "Once we're in the door, we'll be there to stay. We see the market as continuing to grow."

Sioux Manufacturing, along with Dakota Tribal Industries—another tribally owned manufacturer housed nearby in a large concrete building—make up the economic foundation of the Devils Lake Sioux Indian Reservation. For many tribal members, employment at the company has meant their first bank account and their first opportunity to open lines of credit. Officials hope those lines of credit eventually lead to financing for new businesses.

The reservation, located around the state's largest natural lake, includes terrain ranging from rolling plains to the wooded bluffs surrounding Devils Lake. A wildlife preserve located near the lake draws thousands of visitors a year, as does the original Fort Totten, the country's only 19th-century calvary fort that still exists in its original form.

Both the wildlife preserve and the original fort lie virtually within the town of Fort Totten, and their proximity serves as a basis for one of the tribal chairman's economic plans—expand the tribe's arts industry to capitalize on the tourist traffic. Peter Belgarde, tribal chairman, has been taking out ads in state tourism publications to feature the tribe's artists. His hope is to eventually gather the work of the reservation's artists into a central location.

While an arts center won't generate much employment, Belgarde concedes, he hopes it will bring in more income and advance the careers of some artists.

Other long-range plans include expansion of the tribe's buffalo herd (currently 30 head), a proposed cattle operation, and a possible marina and motel on Devils Lake. "We'd like to slowly start moving in that direction," Belgarde says of the plans to increase tourism. "We have landmarks that are important to the tribe that we'd like to promote."

Pine Ridge: One of America's poorest regions hopes for change

In the past, in an effort to get a share of federal funds through minority status, companies would approach the tribe with promises of jobs. Work for us, they would say, and we'll all prosper. But as soon as federal funds were unavailable, the business would fail.

That's how John Steele, president of the Oglala Sioux Tribe of South Dakota's Pine Ridge Indian Reservation, tells the story of past business failures on the reservation. "They would leave and there would be nothing left," he says. "Now, we're taking a new approach."

The new approach means a focus on entrepreneurship. Making broad comparisons to the toppling of government-controlled countries in recent years, Steele says that tribal governments are also probably not the best purveyors of all services. Economic development is a laudable goal of tribal governments, he says, but private entrepreneurship is the vehicle.

All reservations that hope to increase private ownership of businesses face such obstacles to development as lack of capital and expertise. Pine Ridge's problems are exacerbated by its location—the barren plains and badlands of southwestern South Dakota—and by its poverty. While many reservations are poor relative to the rest of the United States, Shannon County on Pine Ridge had the dubious distinction of rating as the poorest county in the country in 1980. (1990 data reveal that Shannon is now second- poorest, behind a Texas county.)

The median household income for the reservation is about $7,000, over 200 percent less than that of the United States (nearly $17,000). Per capita, just 20 percent of 16- to 64-year-olds earn more than $7,000 per year. Also, government employment, including tribal, county, state and federal government, provides about 25 percent of reservation jobs and—in combination with transfer payments—provides the largest source of income for tribal members. As reported in a tribal economic report: "The private sector is much less established and, as a result, does not provide the economic impact it could, given the potential."

With over 20,000 tribal members living on or near the reservation, the second-largest in the country, Pine Ridge's potential lies within its relatively large population. There are no motels on the large reservation (although one is in the process of renovation), one fast-food restaurant and two gas stations. Likewise, as for other reservations, when Indians purchase services or products, they must do so off the reservation.

The Lakota Fund introduces peer group lending

"We need to turn over the money as often as possible," says Steele, adding only half-jokingly—"Once would be fine with me." As part of its effort to keep its spending power on the reservation, Pine Ridge is home to an innovative loan program, the Lakota Fund, that offers "micro-enterprise loans" of as low as $400. The fund, which has become the model for other such funds, so far has provided financing to people who otherwise would be unable to secure a line of credit.

The Lakota Fund, with the aid of the First Nations Development Institute, introduced peer group lending to the United States. Under peer group lending, four to six people co-sign for one another's loans. Payments must be made every two weeks, members must start savings accounts, and other group members must pay if someone else misses a loan or savings payment.

Those development efforts are from within the reservation; from outside, Steele says he hopes to engage the ideas of neighboring communities in his bid to improve the reservation's economic climate. After taking office as president of the Oglala Tribe in May of this year, Steele planned a series of meetings with officials from communities throughout the region.

Unlike some other Ninth District reservations, Pine Ridge's potential for development of a strong tourism industry is somewhat limited by its out-of- the-way location. Even with the popularity of the recent movies "Dances With Wolves" and "Thunderheart," which were both filmed, in part, on the reservation, and with the resultant upswing in drive-through tourists, Steele says the bottom-line impact of the movies has been minimal because the tourists have no place to stop and spend money.

Efforts are currently under way at the federal level for development of one of the Ninth District's most important Indian landmarks—the site of the Wounded Knee massacre—perhaps as a National Park Service memorial site. Steele says the tribe hears from a number of tourists who must make a special effort to find the Wounded Knee location because signage from the main highways is almost non-existent. He hopes any effort to improve the Wounded Knee site also includes plans to help draw tourists to the area.

Over the past 10 years, a growing force for change on L'Anse reservation

It hasn't happened overnight, but positive things are happening for the Keweenaw Bay Indian Community of the L'Anse Reservation in the Upper Peninsula of Michigan. Largely through enhancement of tribal services, the L'Anse Reservation, with a population of about 900, has become the largest employer in Baraga County with a payroll of about 350.

"In the last 10 years we've become a political, economic and social force, which we've never been before," says James Schutte, assistant to the tribal chairman.

At the forefront of the tribe's economic growth has been the rejuvenation of the Keweenaw Bay Tribal Construction Co., which has turned from a five-person struggling company into a 30-employee firm (in peak season) in just a few years. The company's success is largely due to its new management, tribal officials say, under the direction of Mike LaFernier. In recent years, the construction company has built 40 single-family units for tribal members in Marquette and about 35 others throughout Baraga County.

In addition to the construction firm and other traditional tribal government services like police, motor vehicle and tribal courts, the Keweenaw Community has expanded employment through the operation of a resort motel, restaurant, bowling lane, lounge and bingo hall.