Another AZ Big Media Online Feature

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Read the article Tribes Putting Energy into Economic Development now featured on azbigmedia.com. Read how Ak-Chin Energy Services delivers savings to tenants at Santa Cruz Commerce Center.

Just Featured on AZ Big Media Online

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Read the article Developing Projects in a Less Taxing Environment now featured at azbigmedia.com. Learn how building in Indian Country can offer big savings on taxes and utilities.

Understanding Tribal Differences Needed for Successful Development

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For many reasons, developing a project on reservation land is different than it is elsewhere.

When non-Native American developers consider land deals, decisions for the best use of the land are routinely determined by the use that offers the best financial return. When Native Americans consider a lease, investment or land use decision, they typically view it as interconnected with life that has physical, economic, social and spiritual implications, and all of these impacts must be carefully weighed.

This interconnectedness, known as “seven-generation thinking” is how Native American people are taught to think about their long-term sustainability —about making decisions that ensure that their land, air, and water can support all forms of life for seven generations to come. While each American Indian tribe is unique, most tribal people believe there is a responsibility to be considered in balance the with the economic opportunity.

While this is a sacred philosophy for most Native people, most non-Native businesses are not prepared to evaluate decisions from this multifaceted perspective. Generally, more thought, deliberate discussion and due diligence are required to close a deal with a tribal government or Native American business than for a business transaction off reservation.

Not surprisingly, many non-Native American businesspeople may misinterpret this extended decision-making period as inefficiency. For Native Americans, however, this is essential to developing a truly viable seven-generation economy.

The use of tribal land is further complicated by its legal status. Title to tribal lands is held in trust by the federal government. Trust status gives tribal governments the ability to exercise sovereign authority within their boundaries and are not generally subject to state laws. However, trust status also creates limitations on the use of these lands, and most actions affecting the land must comply with federal law.

Another factor complicating the development process is how the land is held in trust. Tribal land can be held either wholly by the tribal community or through a combination of tribal jurisdiction and individual tribal landowners that received a land allotment. When allotted land is involved, even a 10-acre parcel can mean 200-300 individuals need to approve a development deal, adding to the complexity of the development process.

Another Native American tradition that makes doing business different on tribal land is that most tribal communities are communal, and decisions are made with the consensus of the membership, often after long and deliberate discussions. The effort to reach consensus requires that a tribal government reach out to tribe members and bring them into the decision-making process.

This is very different from how decisions are made by city councils, where municipal and county governments decide the land use after listening to planners, lawyers or lobbyists. If residents object, they have to find their own way into the decision-making process.

In addition to the philosophical and land ownership issues, tribes vary widely in their development experience and sophistication. Some have a design review process and standards in place that allows them to move a project through the necessary steps with efficiency. Others lack appropriate tax and zoning codes necessary to facilitate smooth development of any commercial project.

Also, many tribes lack the capital to provide needed infrastructure, such as water, power, and sewage. Consequently, developers may need to include the cost of infrastructure build-out in their cost analysis. The Ak-Chin Indian Community’s industrial park is one of the exceptions. Santa Cruz Commerce Center, which has all of its infrastructure in place, is the only Arizona Native American tribal location to be Gold Certified as a shovel-ready site by the Arizona Commerce Authority.

While doing business on tribal land may be different, successful projects can generate rewards both on and off the reservation in job creation, reduced poverty, and shared resources. Understanding the differences goes a long way in creating success.

How to Improve Business Relationships with Native Americans

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Before traveling to any foreign country, it is prudent to learn how that country’s culture and business practices differ from your own. The same is true when you seek to establish a business relationship with a Native American tribe. There are 22 federally recognized tribes in Arizona and each one operates like its own country. Each has its own tribal government structure, sets its own tax policies, and has its own development process. In order to gain cultural competence, you must first be aware of your own world view and how that may affect your ability to understand, communicate with, and effectively interact with Native people. Understanding common customs and business routines can help you avoid embarrassment and focus on building successful relationships.

Here are five of the most common qualities that are valued by Native people and therefore relevant to your business interactions.

  1. Relationships come first; then business. Laying a foundation for relationships begins with an understanding of history, trust, respect, honor, and tribal sovereignty. A tribe won’t automatically teach you about these things, but you can take the initiative to seek out the information from organizations like the Native Nations Institute at the University of Arizona in Tucson; the American Indian Policy Institute at Arizona State University; or the Center for American Indian Economic Development at Northern Arizona University.
  2. Networking with other professionals who have done work with a tribe is another way to learn about customs and practices particular to a certain tribe. Such affiliation can also help build trust for your relationship.
  3. Time is relative to circumstances. Many Native Americans tend to see time on a continuum of the past, present, and future. This means much can be gained by watching, listening, waiting, and then acting when the time is right. It’s more about respecting the timeliness of an action rather than doing something by a certain time on the clock or the calendar.
  4. Stories are integral to communication. Native Americans often exchange information and convey beliefs through storytelling. Their communication style is greatly affected by their values of humility, respect for elders, and concern for group harmony.
  5. Negotiations are an opportunity for consensus-building. Dialogue should be approached with patience, politeness and modesty. Native Americans tend to be more collaborative and less confrontational than other Americans. Long silences during discussions are typically occasions for tribal members to fully consider the options before them.
  6. Respect personal space. Even though there are varying expectations, some tribal members greatly value keeping a distance of 2-1/2 to 3 feet of personal space between them and others. Soft talk, gentle handshakes, minimal eye contact–especially with elders–and little facial display of emotion are also appreciated among many American Indians.

These are just a few of the cultural differences that may be applicable to interactions with the tribe you want to approach. However, even if you have worked with one tribe before, you only have experience with one tribe. Do not assume that the culture will be the same with another.

When Phil Entz, a Development Management Consultant for UrbanTech Ltd., began working with the Ak-Chin Indian Community nearly 20 years ago, he found the Community to be “one of the most welcoming.” Though Entz had worked with other tribes outside the state and went on to work with a number of other Arizona tribes, his experience was often distinctly different. “I learned very quickly that Ak-Chin is extremely proactive in expanded investments in economic development, partnering, marketing, and accelerated economic growth,” said Entz. “That’s not just different than other tribes; it’s different than most municipalities including cities, counties, and entire regions.”

Learning about foreign cultures can be fun and rewarding, and it’s no different when gaining insight into American Indian tribes. Our approach may be different, but our desire for mutual success is the same.

Native American Tribes Do Not All Operate the Same with Economic Development

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At a recent economic development meeting, I heard a site selector say that he had conducted a research project for an Arizona Native American tribe to compare its competitive advantages to off-reservation locations. Even though the research showed that the benefits of locating a business on the reservation — better lease rates, better utility rates, better tax benefits — far surpassed the off-reservation locations, the perception remained that the development and/or leasing process was “too much of a hassle.”

This misperception may come from yet another fallacy: that all Native American tribes operate the same way. The reality is every tribe has its own unique governmental structure, sets its own tax policies, and has its own development process. Depending on a tribe’s political environment, commitment to outside economic development, and the procedures and policies it has in place, this process can be no longer than any neighboring county’s or municipality’s, or it can be long and arduous. If you look at track records with other reservation projects or tenants, you can get a good idea of how your project may be handled on a specific reservation.

For example, the Ak-Chin Indian Community’s Industrial Park Board shows case studies which detail how long previous projects have taken in planning and design. Moreover, it details a step-by-step leasing and development process that conveys the various steps that must be taken for lease approval. Tribal nations that have put such processes in place can typically streamline responses and approvals more quickly than even some cities and counties.

The successful location of any business depends on due diligence and when proper research and planning have not been undertaken eventual conflicts between landlords and tenants can arise, whether Native or non-Native. Businesses without sound ownership or business plans that are underfunded and that do not invest in marketing will eventually fail, whether on or off-reservation. Just because a tribal community may have a casino does not mean they have money to invest in your business. For most tribes, tribal gaming simply gives them the ability to build houses, schools, roads and sewer and water systems; fund health care and education of their people; and develop a strong, diverse economic base for future generations. If your business does not pencil out as a sound business venture in an off-reservation location, a tribe does not have the extra funds to shore up a company’s deficits. Blaming a tribal location in such cases simply fans stereotypes, but doesn’t excuse a lessee’s lack of investment in his or her own success.

To ensure that you are choosing wisely, there are a number of resources that you can consult when you are considering a tribal location. For example, there are attorneys and financial advisors who specialize in tribal law and taxes. You can contact the IRS or your own tax consultant. You can also review TPR-95-11, an Arizona sales tax law that governs tribal taxes. If you are a small or start-up business, you can reach out to the Small Business Administration (SBA) or a business incubator like the Maricopa Center for Entrepreneurship in the City of Maricopa for help in developing accounting and management skills as well as business and marketing plans. In addition, there are organizations like the National Center for American Indian Enterprise Development, American Indian Chamber of Commerce of Arizona and the Center for American Indian Economic Development (CAIED), located at Northern Arizona University, that can provide information on opportunities in Indian Country.

For the most part, tribal communities welcome responsible economic development projects and tenants because we know this is our path to self-sufficiency. However, tribes also want to work with businesses who are willing to do their part to establish responsible company leadership that respects a tribe’s environmental concerns and cultural practices; understands a tribes’ sovereignty and economic self-sufficiency helps reduce any dependence on government assistance; and values tribes’ economic contributions to the overall health of the economy in the surrounding regions.

As American Indian people, we know that perception can be very hard to change even in the face of overwhelming evidence to the contrary. We also know that when we work together and each side is treated fairly, we can make mutual success a reality. And in my opinion, it doesn’t have to be that hard.