Chocolay Township doesn’t oppose KBIC trust request

The Chocolay Township Board on Monday didn’t oppose the Keweenaw Bay Indian Community’s request for 64 acres of property it owns near the Ojibwa II Casino, shown above, to be taken into trust by the federal government, but asked the Bureau of Indian Affairs to delay its decision until after the completion of the tribe’s $33.5 million development at the casino site. (Journal photo by Rachel Oakely)

MARQUETTE — With a split-vote decision Monday the Chocolay Township Board decided not to oppose the Keweenaw Bay Indian Community’s request for trust status on 64 acres of property it owns near the Ojibwa II Casino, but asked the federal agency making that decision to wait until after the tribe’s multimillion-dollar project to expand the casino site is completed.

The KBIC is planning a $33.5 million expansion of the facility by adding an 80- to 100-room hotel, a 120-seat restaurant and other components, along with infrastructure improvements.

To meet a Jan. 21 deadline to provide comments, the board voted 4-2 to not oppose the KBIC’s request, but asked the U.S Department of the Interior Bureau of Indian Affairs to delay its decision until after the development is completed, expected in late 2017.

Previous reports inaccurately stated the trust acquisition process would require Gov. Rick Snyder’s agreement. However, the governor’s concurrence is only needed when the property being taken into trust would be used for gaming purposes, such as the KBIC’s past proposal for a new casino at the former Marquette County Airport in Negaunee Township, which is no longer being sought.

Tribal officials said the current plan in Chocolay Township calls for all gaming to remain on property already under trust status, while the hotel and restaurant are currently set to be built on non-trust land.

Trustee David Lynch was absent, while Trustees Mark Maki and Judy White voted against the motion.

“My major concern is … to make sure the schools are funded,” White said, mentioning that tribal members residing on trust properties don’t pay school taxes, but their children attend public schools. Property taxes are not collected on lands taken into trust.

Township assessors estimated the portion of the KBIC’s development currently proposed and not located on existing trust property would provide roughly $125,000 in annual tax revenue to local authorities, with about $64,000 going to Marquette Area Public Schools and for other educational purposes. About $15,000 would go to the township and its fire hall millages.

Jennifer Misegan, vice president of the KBIC Tribal Council, said school districts have the ability to apply for Federal Impact Aid funding to make up for revenue lost due to the presence of federal tax-exempt properties. She also said the KBIC often prioritizes schools when making its 2 percent distributions, which is a percentage of the tribe’s casino gaming revenue that must be allocated to local municipalities and organizations under its gaming compact with the state.

“So, they’re not losing out now, and we don’t anticipate they would in the future either,” she said.

Maki was concerned that once trust status is granted, the township would lose its control over future developments. The tribe has noted the possibility of an additional 100-room hotel, half of which would be situated on currently non-trust property.

“The question really comes down to … our ability to have control over how the development operates versus not having control over it, and our zoning ordinances … and our master plan tells us that we should have control,” Maki said. “It’s our responsibility as township board members to protect the public health, safety and welfare, and the only way we can do that is the exercise of our ordinances. … We either have to impose local control or say we don’t care; I care.”

Misegan said the KBIC was just as concerned with the safety, health and welfare of the public, and that once the property is taken into trust, it would still be subject to federal and tribal regulations, as well as oversight by various gaming commissions.

“First of all, Indian Health Service would regulate it, so there would be federal requirements … and then the tribe would have the ability to enact their own laws, and many times our laws are more restrictive than the local ones,” Misegan said.

Tribal officials said if the property is taken into trust it would also alleviate an employee complication related to the payment of state income taxes and the distinction between trust and non-trust operations, such as the existing casino and the proposed hotel, respectively.

“Employees who are Native American and work at the casino wouldn’t be obligated, if they worked in the portion that’s off-reservation, to pay state income taxes,” KBIC CEO Larry Denomie III said.

Tribal officials also said customers wouldn’t be required to pay state sales tax, and that the township likely would see an increase in the 2 percent gaming distributions it receives from the KBIC, which have averaged $80,000 annually, as well as the potential growth of other supportive businesses.

The KBIC’s application to the Bureau of Indian Affairs, which indicated the use of the subject property was not going to change, was also questioned.

In response, tribal officials said due to the length of time it takes for trust status to be achieved, the application was sent in a while ago and is in the process of being updated to include architectural plans and other details.

“We didn’t have those types of things at that time,” Denomie said. “We had ideas and thoughts, but now that it’s more formal that will be updated to include that information.”

Chocolay Township Manager Steve Lawry said as proposed the project is currently in compliance with local regulations, and likely will remain so throughout completion of construction.

“It is expected that with the build-out date of late 2017, that all the current proposed construction would occur under the regulations before any decision on trust status is likely to be rendered … The rules we have in place are being followed at this point, and probably will be in place throughout construction of what’s proposed right now,” he said.

Additional concerns have been expressed over the aquifer’s ability to meet the water demand of the new development, though KBIC members said studies they had completed indicate there will not be a problem.

Ryan Jarvi can be reached at 906-228-2500, ext. 270. His email address is rjarvi@miningjournal.net.