Posts

Just Featured on AZ Big Media Online

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.

The advantages of locating a commercial building on Native American land

When looking for new sites, food processing facilities typically want to be in operation in 6-12 months. To reduce the time involved, companies often limit their search to sites with existing buildings that can be retrofitted, but may be less than ideal in the long-term.

Concentrating a site search only on conventional locations may lead companies to overlook the truly unique advantages offered by Native American reservations. Many federally-recognized tribes can offer unparalleled tax advantages, incentives, and project fast-tracking abilities that most states, counties and municipalities simply cannot. Any hesitancy may come from a lack of understanding of how reservations work. Still, not all tribes operate the same way or offer the same infrastructure.

If considering a Native American location for a supply-oriented food processing facility, one consideration is the availability of the commodities used in the manufacturing process. Locating near the type of crop or supply chain production used in manufacturing can significantly lower your procurement costs. In addition, in areas where there are other agricultural endeavors, there is often ready workforce availability and training resources already in place.

If your food processing business is demand-oriented, a location near consumers helps to mitigate the costs of transportation and distribution. In this case, you will want to look for reservations that are not too isolated and that have ready access to transportation corridors.

Ever-changing food industry trends can be a more determinant factor than even access to raw materials or consumers. This can mean securing a flexible site that can quickly adapt to changes in design to accommodate new regulation; new food safety issues; implementing automation; and achieving greater energy efficiency. Most Native American communities will not have an existing building to occupy. However, if the reservation has an in-house development and approval process to speed projects to market, even a build-to-suit facility can be completed in a short timeframe.

According to Billy Hickman, Vice President of Operations of Hickman’s Family Farms and a Santa Cruz Commerce Center tenant since 2003, this is what attracted their enterprise to the Ak-Chin Indian Community’s industrial park. “Their ability to craft a customized lease allowed us to amortize construction costs over the length of a long-term lease and have a facility built to our specifications in just 10 months,” said Hickman. “We’ve been able to expand two more times since our initial construction, too.”

Finding a tribe with the same industry or cultural focus can also lead to some creative synergy. “When we needed to find a solution for dealing with our chicken waste, we were able to create a reciprocal agreement with the tribe, ” said Hickman. “Now we provide it to Ak-Chin Farms as fertilizer for growing the crops we need to feed our flocks.”

Other areas of concern for food processors are water availability and utility costs. While Arizona tribes just like all cities and counties must be prudent in their water usage, some tribes have settled their water rights, which has guaranteed their allocation, while some have yet to do so. In addition, if a tribe owns its own utilities, costs can be significantly lower than off-reservation locations.

Given the location characteristics that are important for food manufacturing firms and what Native American reservations can offer, there is good reason not to limit your search to conventional choices. In any case, how fast you could potentially grow by expanding your location options is certainly food for thought.