MARQUETTE — The Chocolay Township Board asked for more time Wednesday to provide comments on the Keweenaw Bay Indian Community’s request for property it owns near the Ojibwa II Casino to be given trust status by the federal government, but approved measures related to improving the area’s water system, a necessary component of the tribe’s project to expand its casino property.

The nearly 64 acres of property is located to the west of Kawbawgam Road and south of M-28, adjacent to the casino and tribal residential neighborhoods.

Should the Bureau of Indian Affairs allow the property to be taken into trust, the measure would also need Gov. Rick Snyder’s consent.

The KBIC recently broke ground on a $35.5 million project at the property that includes expanding the casino gaming facilities, and building a new hotel, entertainment complex, three restaurants and a conference center.

KBIC CEO Larry Denomie III said the hotel and a restaurant are currently planned to be built on non-trust property, while the rest of the development would occupy lands already in trust status. Denomie said the project also requires relocating two wells to improve the water system and relocating three housing units.

The township board unanimously approved asking the Bureau of Indian Affairs for an extension on the comment period, which would give the board until mid January to provide comments.

Property in trust is tax exempt. Township documents show the KBIC paid slightly more than $2,500 on those parcels not in trust this year, with about $300 going directly to township coffers. It was unclear how much tax revenue the property would generate following completion of the expansion project.

Meanwhile, under a tribal-state gaming compact, the KBIC also allocates 2 percent of its gaming revenues to local communities.

Chocolay Township Manager Steve Lawry said the payments average $80,000 a year, and that the township has received more than $500,000 since it began collecting the funds.

KBIC realty officer Jason Ayres said the township in 2015 received $92,000 in gaming revenues from the tribe.

“Our hope would be to get the township board’s support in our activities out there, and thereby increase — potentially and hopefully — those 2 percent payments in the future, and also increase employment out there,” Ayres said. “I don’t have exact figures, but I believe the tribal work force is about two-thirds non-Indian, so that will also increase state income taxes, as well.”

Denomie said the KBIC will provide township officials with whatever information they need regarding the project.

“We’re not here to pull any fast things on you or anything like that,” he told board members. “We want to be good neighbors, we want to make sure that our relationship continues and grows and that the funding that you’re receiving now from the community, as far as the 2 percent distributions, continues and increases.”

Meanwhile, the board with a 6-1 vote approved acting as a pass-through agent for the KBIC, allowing the tribe to use advanced 2 percent payments as a means of financing a portion of a $1.6 million water system expansion and establishment of a 75,000 gallon elevated water tank.

“The water supply is something they need to build to expand their facilities on the property, and they’ve indicated they do plan to go ahead whether the trust status is gained from the federal government or not,” Lawry said.

Under the proposal, the KBIC would pay $995,000 for new wells, piping, a treatment system and pump house. It would also give the township $605,000 under the 2 percent payment rules, which the township would pass on to the contractor performing the work.

“They have indicated they would not use that to basically replace the normal funds that they have been sharing with us on an annual basis,” Lawry said. “But they would like to be able to write that off over a period of years as donated to Chocolay Township and used by the township for other purposes — other purposes being at least fire protection improvements for that portion of the township.”

Township documents state there are 62 homes bordering Kawbawgam Road east of the casino.

Lawry said the project could allow the township to build off of the KBIC’s system and provide water to township residents nearby. However, he said he couldn’t “identify township funds that would help build that water system off of the tribal lands.”

He also said it was unclear how many residents would be interested in abandoning their private wells and hooking up to the township’s system should it become available.

Township Clerk Max Engle said one concern he’s already heard from residents is the availability of water in the area, and the possibility of it being reduced after the KBIC’s expansion project is completed.

Jennifer Misegan, vice president of the KBIC Tribal Council, said studies conducted by GEI Consultants Inc., a Marquette engineering firm, had shown there is an adequate water supply in the area to meet capacity demands.

The township board with a 5-1-1 vote authorized spending up to $5,000 to gather more information on the costs associated with constructing a municipal water system in the area.

Trustee David Lynch, a resident in that area, abstained from a vote on expending the money under the premise he could be directly impacted by any water project, but he did approve acting as a pass-through agent for the KBIC’s project.

Trustee Judy White voted against both motions, but didn’t say why.

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