Board weighs KBIC partnership

Marquette Township may soften its stance on the Keweenaw Bay Indian Community’s request for federally designated trust status of its Ojibwa Express gas station along U.S. 41. Officials said previous township concerns, such as emergency response services and zoning regulations, could be alleviated through an intergovernmental agreement with the tribe. Meanwhile, the township is seeking financial assistance from the KBIC related to the $1.5 million construction of an underpass beneath U.S. 41. (Journal photo by Ryan Jarvi)

MARQUETTE — With hopes of securing financial assistance for the construction of an underpass beneath U.S. 41, Marquette Township is considering softening its stance on the Keweenaw Bay Indian Community’s request to have its Ojibwa Express gas station property be awarded trust status by the federal government.

The KBIC made the request last year to the U.S. Department of the Interior Bureau of Indian Affairs. In a May 2016 letter to the BIA, the township indicated potential concerns with the tribe’s trust acquisition proposal, including the ability to provide governmental services, such as utilities and emergency response; noncompliance with local zoning ordinances and regulations; and the loss of tax revenue.

“Although they would not be willing to be governed by our ordinances, (the tribe has indicated it) would comply with them under an intergovernmental agreement, and would make us whole in a — for lack of a better term — a payment-in-lieu-of-taxes type of arrangement that would not diminish our revenue stream,” Marquette Township Manager Randy Girard told board members at their May 16 meeting.

Properties taken into trust are not subject to property taxes. Taxes generated by the Ojibwa Express property and an adjacent vacant lot totaled about $33,600, according to the township’s letter.

KBIC Tribal Council President Chris Swartz said his council would likely have to host a work session to discuss details of any agreements, and township officials said a joint session between the two panels could be arranged.

Considering the financial agreement between the tribe and township, Supervisor Lyn Durant noted one downside could be that other entities receiving tax revenue generated by the Ojibwa Express property would see cuts.

“When you pay your taxes, it’s broken up into 15, 20 different pockets,” she said. “It goes to the senior center, the (Iron Ore) Heritage Trail, all of them that are on the tax bill. So, by not having you pay straight taxes, those entities would not participate in whatever we do with you.”

Andrew Chosa, CEO of the tribal business development corporation Aanikoosing Inc., said communities impacted by the presence of trust land are eligible for federal impact aid.

“They essentially can just keep track of what they should be getting and then they would be able to submit applications to the federal government in order to replace what may have been lost,” he explained.

Swartz said between 1999 and 2014 the KBIC contributed about $6.14 million to organizations and municipalities in Marquette County through its 2 percent gaming revenue distributions, a requirement under the tribe’s gaming compact with the state. During that period, the KBIC also contributed 8 percent to the state, which Swartz said totaled about $24.5 million.

“The operation of the Ojibwa Express (also) generates tax revenue in the form of personal income taxes, corporate and business taxes from contractors and suppliers, and in many cases sales taxes on materials purchased directly by contractors and suppliers around here,” Swartz added.

Jason McCarthy, township planner and zoning administrator, said the township has applied for a portion of the KBIC’s 2 percent distributions to assist with design, engineering and construction of the U.S. 41 underpass, which would be located between Menards and AT&T. The underpass, expected to cost around $1.5 million, would be used by non-motorized traffic and snowmobiles during certain times of the year.

The township is seeking a state grant, which, if approved, would be used as the local match for a federally funded grant that would cover the underpass construction expense. However, the township is seeking financial assistance from local organizations and businesses for the state grant’s $75,000 local match, which must be in place by October.

McCarthy said the KBIC’s 2 percent distributions in the second half of 2016 was $690,000, the largest portion of which went to Chocolay Township where the KBIC has its Ojibwa II Casino.

“Communities that are impacted most by the tribe’s activity have historically had priority when it comes to distribution decisions,” McCarthy said, later adding, “I’m not trying to single out other gas stations, but this convenience store is a shiny new one in our community, and it just happens to be owned and operated by the tribe. If there’s opportunities to … improve our relationship, we would hope that the (township) board would consider that.”

Trustee John Markes encouraged board members to propose specific initiatives they might want funded through the KBIC’s distributions, such as the roughly $50,000 the township may levy through a special assessment to purchase an ambulance for its fire department.

“If (KBIC) made that sum available, we could simply cancel the (.15- to .25-mill) tax increase we’ve been considering,” he said. “There wouldn’t be a tax increase to our citizens with that contribution, and I think that that’s important as any other indication that’s been made to them about what assistance we desire.”

Responding to previously noted concerns, Swartz said the tribe hasn’t had any issues in the past complying with state or local laws and regulations, and that the BIA and the Indian Health Service conduct various inspections of tribal operations multiple times per year, which he said were just as rigorous as those mandated by the state or local governments.

“The (KBIC’s) future plans for the property — for example, adding retail space, or even a car wash — are consistent with Marquette Township zoning regulations and land use planning requirements,” Swartz said. “There is no reason to believe that the community’s use of the Ojibwa Express property, present or future, would pose any threat to the public health and safety, nor would it undermine any other legitimate public policies.”

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